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!