Are You Using the Best Financial Products for You?

Are You Using the Best Financial Products for You?

Long before I started a personal finance blog, I was someone who secretly loved comparing financial products. I was always on the hunt for the cheapest chequing account with unlimited transactions or the savings account with the highest interest rate, and I wasn’t afraid to switch banks (multiple times) to get the best. As soon as I discovered free options, I was hooked and knew I would never go back to paying for my daily banking products. I used Coast Capital Savings for 5 years, then switched to Tangerine (formerly ING Direct Canada) in 2012 and haven’t looked back since.

Even though I’ve always cared about using the best banking products, it took a long time for me to start caring about my credit cards. In fact, it wasn’t until early 2015 that I finally bothered to compare all the rewards credit cards available in Canada. It’s obvious why I pushed back on the idea for so long: after close to a decade of using credit cards like they were free money and carrying the debt around, I didn’t trust myself to use a rewards credit card properly. But in early 2015, I did the comparison, picked two cards and used them for two years – until I decided they weren’t the best cards for me anymore…

Note: There are no affiliate or referral links in this post. Like past posts on this topic, I simply want to share information on the financial products I use and talk about why I use them!

Let’s go back in time to two years ago: I was working full-time and travelling (almost) constantly. Some months, I was only on the road for 5 days. But most months, I was gone for at least two weeks. And sometimes, I was only home for 5 days. Where was I travelling to? Usually, Toronto for work. I also took advantage of the fact that I worked remotely and visited family/friends often. Needless to say, I was a good candidate for a travel rewards credit card. And because of how often I travelled within Canada, the WestJet RBC World Elite MasterCard seemed like a good fit.

I remember being hesitant to pay an annual fee for a credit card. After using basic free credit cards for years, the idea of paying $99 to use one didn’t exactly spark joy. But the bonus $250 of WestJet dollars offset the fee. And during the two years I used the card, I earned an additional ~$500 of WestJet dollars. I also used a $99 companion voucher when Sarah and I flew to NYC in May 2015, which saved us an additional ~$500. So in two years, I paid $297 (2 x $99 annual fee + $99 companion voucher) and saved ~$1,250 in travel costs. That’s a net reward of $953. Sounds good, right?

It was good! In fact, it was a great card for the first year I had it. But after I quit my job, I stopped travelling within Canada as much. It was also impossible to use my $99 companion voucher (you get one every year) on flights to certain cities outside of the country, which is where I wanted to go. The numbers don’t lie: it was a great card, and is an excellent option for anyone who does a lot of travel in this country. But I grew tired of the restrictions and wanted something that came with more options. So, I did another comparison in January and decided to switch over to the RBC Visa Infinite Avion.

Before I talk about why, let’s look at the second card I was using: the Scotia Momentum Visa Infinite. The reason I signed up for this card in 2015 was because the annual fee was waived for the first year (value of $99). It’s also been rated one of the best cash back credit cards in Canada for years, because it offers 4% on groceries and gas. If you have a family (or just spend a lot on groceries) or commute, earning $4 for every $100 you spend is a huge reward for your spending! And it adds up fast. In two years, I paid $99 (1 x $99 annual fee) and earned ~$500 in cash back. That’s a net reward of $401.

So again, it was a good card. But there were also lots of little things about it that bothered me. For starters, it took up to a week for transactions to be posted online, which is extremely frustrating when you’re someone who forgets to keep receipts but likes to track your spending. The cash back categories also weren’t great for me. I barely spend money on gas (a 4% category) and almost never spend money at drug stores (a 2% category). So, I did another comparison in January and decided to switch to the Tangerine Money-Back Credit Card.

Now, here’s where I’m going to geek out over my new cards like they are shiny new toys – because in a way, they are. When used responsibly, these two little pieces of plastic give me the opportunity to earn rewards for simply doing all my regular spending. I’m no longer restricted to just flying with one airline. The points I earn with my new RBC Visa can be used for flights, hotels, car rentals and other travel-related costs (plus it has good travel insurance). And with the Tangerine MasterCard, I pay no annual fee and I get to choose the three categories I earn 2% cash back on – and I can change them anytime!

Before impulsively filling out an application, I played around with my numbers and picked the three categories that made the most sense for me personally. I know I spend an average of $300 on groceries, $150 on bills and $150 at restaurants each month, so I plugged those amounts in and found the Tangerine MasterCard would be the better card for me – even if it meant losing the 4% cash back on gas. (This is another benefit of knowing your numbers, which is what we are talking about on Budgets and Cents this week!) The savings was minimal (and will likely end up evening out), but when I factored in the fact that transactions get posted right away with the Tangerine MasterCard, I was sold.

I can’t say for sure if the RBC Visa will be the best card for me, but I figured it was worth trying! The welcome bonus is worth up to $350, which offsets the $120 annual fee for almost three years. And aside from the fact that I didn’t want my travel rewards credit card to be attached to a specific airline, I also switched to this card because it was a Visa (don’t want two MasterCards) and because RBC holds my longest credit history. I got my first credit card with them in 2004, and have just switched the type of card I use without cancelling any old cards and erasing that history (which I would never want to lose). Needless to say, I’m an RBC credit card customer for life.

New Financial Products = New Budgeting Strategy

One of my goals for the slow money experiment was to change my budgeting strategy. I’m realizing that was perhaps a bit misleading, because the only thing I really wanted to change was the two credit cards I use. I’m happy with the methods in which I track my spending, add up my numbers and my net worth, etc. On a day-to-day basis, I feel in control of my money and that’s the main purpose of budgeting. Instead, now that I’m equipped with two new credit cards, I had to designate one for personal (Tangerine) and one for business (RBC) and then switch over all my recurring monthly payments. Now that that’s done, I can cross another goal off the list!

So, how does any of this information help you? If you’re Canadian, you might be curious to hear which credit cards people use. And if you have any questions about these four cards, specifically, I’m a nerd and would love to chat about any/all of them in more detail. But no matter where you live, I hope this super nerdy post serves as another reminder that you’re in control of which financial products you use. What you’re using today doesn’t have to be what you use forever – especially if you’re not happy with it.

If you’re paying too much in banking fees, try to negotiate with your bank or make the switch to cheaper/free options. If you’re not earning any rewards and don’t carry a balance, look at other credit cards. It seems like a hassle (and sometimes it does come with a little paperwork) but it just takes a little organization on your part. And if you’re not happy with the products you use, you’re allowed to switch to ones that are better suited for you. Your existing bank is not the boss of your money, you are!

Whenever someone asks how they can talk about money more openly with their family/friends, I suggest starting small by asking which financial products they use. Or go a little deeper and ask if they are happy with them. In my experience with those conversations, most people are still paying high fees for no reason and getting zero bang for their buck – and they are not happy about it. You’re allowed to want more for your money. You earned it. It helps you pay for your life today and will fund your life in the future. So do the legwork and the paperwork. Find the best financial products for you. Then spread what you know. Because the more we talk about this stuff, the more we’ll all learn from each other.

So, now I have to ask: are you happy with your existing financial products? :)

PS – My last goal for the slow money experiment was to change my investing strategy. This deserves a post of its own, so look for that on Friday! Then we’re onto a new month, friends!

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    • Haha, I love that your first comment on my blog is about financial and investment products. This is so indicative of our friendship.

  • That’s such an interesting post Cait gave me some food for thought on my owning banking situation. I’m not from Canada but Ireland and think the hassle of changing my bank and direct debits etc… makes me slow to make the move. But I also know some of the fees are ridiculous and annoy me when I get that letter in quarterly. Will have to do my research and see how easy/difficult it will be to move my banking somewhere else or even see is there any better accounts within the bank. Wish me luck 😂

    • I wish you so much luck, Sharon! And honestly, I’m not saying everyone needs to up and move their money around – but just look and see what’s out there. Knowledge is everything :)

  • I’m pretty happy with my financial products, but I’m a nerd. I use a high-yield online savings account after switching from my local credit union (they had terrible service!). I also have my investments with Betterment and I can’t complain about them. I always try to recommend good products and services I like whenever I hear people complaining about their own – except for travel credit card rewards. For most people, I think it takes an extreme amount of discipline to use them correctly. If you use them wrong, they’ll cost you more money than they’re worth. I’m not willing to put that on someone unless I know they’re super responsible or I stress how much work it really is to do the credit card churning thing.

    • I totally agree – with all rewards credit cards, in general. If you can’t pay off the statement balance each month, it’s not worth it. Not at all. Never, ever.

  • I can honestly say that I have no clue if I’m using the best financial products for myself and my family – which means that I am most likely NOT using the best products. I do have free checking and all that jazz and I do get rewards on the credit cards I use, but I surely have not optimized it. We try to not use credit cards at all, but there are areas where it makes sense, like for travel.

    This post has definitely made me think about all the cash we’re probably leaving on the table. With my husband traveling more and more for work (he gets reimbursed but we have to shell out airline fees up front) this is something we should start tracking! Thanks for the insight!

    • Glad it made you think! I’d be hesitant to charge huge travel expenses to a personal card, if only for the fact that it might take a long time to get reimbursed, and I wouldn’t want anyone to be charged interest (especially because it quickly wipes out the value of the rewards). But if it could work for you guys, it’s worth exploring your options.

  • 2017 has been a year to make big changes like this for me, too. After 11 years with Wells Fargo (I actually started with Wachovia, before they were bought out), I recently closed all of my accounts there, including my oldest credit card. The majority of my credit cards are with JP Morgan Chase (I’m sorry if this is rubbing salt in the wounds, but Chase credit cards like Sapphire Reserve, Sapphire Preferred and Freedom Unlimited, plus co-branded cards with airlines and hotels come with some AMAZING sign-up bonuses here in the States) so I also signed up for a checking account with them and got a $300 sign-up bonus!
    After the fall-out from Betterment’s price increases, I opened a Vanguard account and have been waiting on my money to show up from my rollover. Also, my 401(a) provider was changed by my employer, but that was actually a change for the better (lower fees) so I am happy that it was forced upon me!
    I also tried to re-finance my mortgage to a 15-year fixed mortgage from my 30-year Adjustable Rate Mortgage, but unfortunately my appraisal came in too low, due to very few comparable properties (townhouses are quite rare in suburbia). Since that fell through, I went ahead and signed up for another credit card (Starwood Preferred Guest) to earn a bundle of flexible hotel points that can be transferred to airlines! All of that in just the past 59 days :)

    • Holy moly! Sounds like you’re getting all your financial ducks in a row this year, too! This feels like my new version of spring cleaning, haha. And yes, our sign-up bonuses are a joke compared to yours… take advantage of them!

  • I also never thought about my credit cards until 2015. My parents had opened one for me 15 years ago and since I used my debit card for everything, I thought, who cares? I thought it wasn’t worth the hassle to look for/apply for a new one and I thought all credit card companies were evil (okay, kinda still do), but when I realized I was leaving rewards/cash on the table, I looked into a better card. (Note: I’m American, so these are American cards.) I started using CitiBank’s Double Cash card, nervously at first because I wondered if I would use it responsibly and pay it off each month but that’s not been an issue. I get cash back faster for paying it off! I thought I’d be content with that for a while, but now I’m starting to travel more and just last week looked into travel cards. I never thought I’d pay for a card, but the Chase Sapphire Reserve card stood out as the clear winner and the fee will essentially be paid back by the rewards. I am so excited for my “shiny, new toy” (I feel that way too). I’m looking forward to using it and balancing my purchases between the two cards to get the best benefits. Finance geeks unite!

    • Ugh, you Americans and your Chase Sapphire Reserve cards, haha. It seems like the hottest card in the personal finance space, these days! Thanks for sharing your experience with becoming a responsible credit card user :)

  • Ahh, interesting! I don’t give much thought to my bank account and credit card choices, but it’s true that we need to evaluate these just as much as our expenses. I’ve used USAA after a bad experience with Chase and overall I’ve been satisfied. I just don’t like how their rewards points card doesn’t earn quite as many points as other cards. I think we’ll stick with them, though, since it’s more convenient to have all of our bills in one place.

    • I understand the convenience aspect, though there are studies that show people leave a lot of money on the table because they want everything to be with one bank. For that reason, I still suggest calling your bank and trying to negotiate whatever you might be unhappy with! They can’t change rewards cards, but they can lower fees, etc. ;)

  • You inspired me to change my CC today after having the same version for 16-ish years. Switched from Aeroplan specific to a general travel rewards Visa. Thanks for the post! :)

  • We just switched CC Providers to scoop up the Bonus rewards points, not sure we will stick with the card after the first year, but will get a few free flights!

    With how easy it is to switch Financial Institutions online it’s a great idea to evaluate and move to the best deal!

    • Couldn’t agree more! It takes a little organization, but is usually a lot easier than we worry it will be.

  • Hi. I did the same thing about two years ago. We switch to Tangerine and kept our RBC Infinite Avion. I have an urge to cancel the old credit cards we don’t use anymore in an effort to minimize and feel more organized. Why would or wouldn’t you cancel the old cards?

    • So, I wouldn’t cancel the old card IF it holds your longest credit history. For example, I’ll keep some sort of an RBC credit card forever, because I have 13 years of history with them. I may decide the Avion isn’t the best card for me, and switch it down to a no fee card (like their Rewards+ Visa: http://www.rbcroyalbank.com/credit-cards/rewards-credit-cards/rewards-plus.html) – so something like that could be an option for you. I know it doesn’t minimize the number of cards you have, but IF it holds a lot of history for you, you should keep it and just switch to something that doesn’t cost you anything. Now, if it does NOT hold your longest credit history, go ahead and cancel it. I cancelled the Scotia card I mentioned in this post. It’ll temporarily put a small ding in my credit score (maybe 10-20 points!?) but it’s TEMPORARY and I don’t need a perfect credit score right now (not applying for any major credit, like a mortgage, anytime soon). Does that help? If not, ask more questions! I love talking about this stuff :)

  • This is just a timely post for me! I’ve been putting off calling my bank and negotiating my monthly fee ($11). As far as credit cards go, I’ve heard that cancelling a card can affect your credit score negatively so I’ve always been vigilant—is that the case?

    • When you cancel a credit card, it will temporarily put a ding in your score, yes. But there’s two things to consider. First, is it your oldest credit card that holds a lot of your credit history? If so, don’t cancel it – ever. And second, if it’s NOT your oldest card and you don’t need your credit score anytime soon (i.e. if you’re not applying for a loan or mortgage or anything) then don’t worry about it. The small ding it will cause is only temporary, and continuing to use your other forms of credit will help it go back up. So, I cancelled the Scotia card I was using for the last two years. My score will take a small hit, but it’ll bounce back!

  • We have two credit cards–one Master Card and one Visa. Both pay cash rewards. We charge nearly everything we buy, including groceries and fuel, but pay in full every month. We get a LOT of free money every year using this system. BTW, my husband uses primarily one card and I use primarily the other which makes keeping track of our spending even easier since we tend to make different categories of purchases. Thus, if a clothing purchase shows up on his card he knows it’s bogus before even asking me. If one gets hacked, which happens occasionally, we both change to the other until a replacement card arrives.

    • Ahhh, I like that system! Using separate cards, that is. Could be an interesting way to budget! Thanks for sharing, Linda :)

  • Thanks for the reminder to reevaluate these every so often. We got the Southwest Airlines cards to get a companion pass, but after we got the pass we switched back to our Fidelity Visa that gives 2% back on everything.

    5% back on certain categories from a different card sounded sexier, but it turned out that we come out ahead with the 2% on everything. Fidelity could definitely make the card prettier and shinier (it’s just a dull green), but it serves its purpose well.

    • Haha, isn’t it funny how we notice what the cards look like now? I’ve never cared before, but when the Tangerine MC came in the mail, I realized it might be the coolest looking card that has ever been in my wallet.

  • What a timely post! Today I added up my monthly fees with TD Bank (as they no longer offer free checking) and was astounded at the total! So, I consolidated retirement, checking and savings with Fidelity. No fees of any kind! Thank you for sharing.

  • This is a great post Cait, and I am glad you are taking advantage of the benefits credit cards can offer. We have selected our credit cards judiciously and have reaped lots of cash and saved some fees. We use the National Bank World Elite MC for all purchases other than food purchased at Provigo/Loblaws. It provides between 2 % and 2.5% cash back, with a great trip cancellation and interuption and car rental insurance. I make sure to book all travel with this card. We recently renovated a condo and purchased all of our renovation materials with this card. Over the past 18 months we have cashed 2K in rewards. We use the President’s Choice World Elite MC for all of our purchases at Provigo/Loblaws. I purchase about $1000 of food per month and usually exchange about $80 cash-back per month. It’s awesome! Finally, we hold what was formerly the Sears Mastercard, which is now a Scotia MC. I signed up for this card because it does not charge foreign transaction fees and we use it only when we travel abroad. I evaluate and compare our credit cards about once a year, but two of these cards have a very long credit history and I would hesitate to cancel them. I have discussed the benefits of these cards with friends (especially the benefit of not paying foreign transaction fees to my friends who travel, but their eyes just glaze over!).

    • Ooo yes, no foreign transaction fees is an amazing benefit! That’s awesome, Marie-Josée! I can assure you my eyes are not glazed over ;) they are wide with jealousy, haha.

  • I love that I am not the only one that geeks out about financial products Cait. I made the move to Tangerine bank accounts a few years ago and couldn’t be happier. I had a Scotiabank momentum visa but got a Tangerine Master card in December. I love that you can choose your categories for cash back, and they gave me an introductory 4% cash back for the first three months. And just like you mentioned, I was always annoyed that it took Scotiabank a long time to post your credit card transactions – I love that I can see all of my transactions for my Tangerine card right away. And you can’t complain about no annual fee!

    • Oh my gosh, waiting for transactions to post on the Scotia site was beyond frustrating. I’m so glad those days are behind us, Nicole! PS – Hope you’re well :)

  • Thanks for the great post Cait! It’s a massive project finding all the financial products that work best for you, but so worth it!!
    I’ve been using Tangerine for chequing and EQ Bank for short-term saving and really adore both. Some of the best by-products of making the switch from TD was that I no longer feel loyalty to my bank or fear the hassle of moving my money if it’s not working for me.

    • Ahhh, what an interesting realization, Jamie! That makes sense to me: switch once, see that it’s not so hard, then you’re comfortable ditching your loyalty and doing it again (if needed).

  • This is so timely, as I’m contemplating switching credit cards to maximize my rewards. I have been using the UPromise card which allows you to accrue points to pay down student loans, but I’m almost done paying down my student loans–WOOT!–so it’s not a useful benefit for much longer.

    I appreciate your thoughts on annual fees and how to take a real look at the cost/benefit of rewards and incentives. Very helpful. Thanks!

    • Oh wow, that sounds like a neat card! Definitely start looking around at what could help you most next :)

  • Thank you for this post, since it’s a neglected area in my financial independence journey! It’s much easier for me to squeeze my pennies than think about how to optimize them. And I’m happy with where I put my retirement savings–Vanguard index funds. But there are lots more areas to consider.

    In general, I have been happy with keeping my checking account at a local credit union. We used to get 2% interest on it, but that is no longer the case. I just switched my direct deposit to Chase Bank for a 6 month period in order to qualify for a $300 sign-up bonus, but I plan to go back to the credit union, which feels safer, after that time.

    Credit cards are the area where I have everything to learn. I hardly use them.

  • I have been with RBC for 17 years. Is it necessary to have a long term relationship with your bank anymore?
    Recently my 18 daughter got caught up in one of those email scams. RBC cashed a fraudulent cheque and released the nearly $2,500 to her without verifying or holding the funds at all. She had $800 in her account at the time and only 4 months of regular activity but say they released it because she was a long standing customer (I opened the account when she was 6 years old) and because I am also on the account. Apparently the limits I put in place to protect her meant nothing, as the tellers can override these with ease. The bank took no responsibility even though they confirmed that her account had a $100 unverified limit.
    She now has an account elsewhere but reluctant to close RBC completely. Do bank accounts affect your credit score like credit cards? Does the length of time you’ve been with a bank benefit you at all?

  • I have a low-interest credit card with RBC, but I’m not really happy with it. I opened it years ago, only because I had an account with RBC already. In my hometown, the only other bank was TD Bank, so I sort of picked RBC by default. I’ve tried to end my financial relationship with them many times, in favour of Tangerine and PC Financial (no fees!) but it’s been hard. I don’t want to cancel my account and loose all my credit history with them.

  • Hi Cait,

    I am a nerd like yourself when it comes to my banking products. I have a gold Amex with Scotia. Annual fee is $99, but I get 4% back on groceries, restaurants, gas stations etc. and the points are very easy to redeem either for rewards, or you can just apply them very easily to anything travel related that is on your statement for that month. The only drawback is that it takes it few days for transactions to get posted. I also got a $350 welcome bonus. Absolutely love that card!

  • Thanks for sharing your thoughts! Now that I’m back in Canada, it’s time to optimize my accounts for real. Thanks for inspiring me to make it happen.

  • Hi Cait,

    I need to thank you so much for this blog! I found it this past summer when I was wanting to take control of my finances and it has been so encouraging and helpful! I bring it up all the times and rave to my friends at dinners all the time about how liberating it is, especially that you are a BC girl too.

    I just recently went through the hassle of switching credit cards and banks, but am so glad I did. I was with BMO, all student, no charge accounts and the BMO Student Air miles MasterCard, but they finally caught on to the fact that I’m no longer in school and started charging me for everything. I loved the idea of air miles but hated how hard it was to get flights at busy times of the year.
    I set up accounts with Tangerine, intrigued by all your luck and good words about Tangerine, but got frustrated by the amount of work on my part and lack of physical presence of a bank near by, so I gave up on them, though loved the idea of free banking!!!!!!!!
    I did some quick research online and finally decided to go with RBC, ultimately out of personal preference. The my chequeing account monthly fee is the same as most other mainstream banks (Scotia, BMO, TD etc.) and no fees for my generic saving account, also I appreciated the fact that I could go into a bank and set up an account with a customer service rep.
    As my TFSA and a few terms are with a Credit Union, I compared their credit card options with RBC’s, wanting to condense my banking footprint. It was important for me to not pay an annual fee, while still getting some sort of travel advantage, so finally I decided to go with my Credit Unions No Fee MasterCard. There was a bonus of 1000 points for signing up and I earn 1 point per dollar spent. I haven’t looked into using the points yet, but enjoy that I don’t have to stick to one airline when I do go to use them.

    Thank you for empowering me to take control of my finances and getting me excited about saving :)

  • LOL
    So I use both the Scotia Infinite and RBC Westjet still. For me they make good sense still due to our varied spending and flying we do for the business. Great overview and one big benefit to switching every few years alone is the benefit of the sign up bonuses.