Credit cards

October 30, 2021

Half of travel points customers frustrated with redemption process, says survey

Every person loves the idea that they could earn points while spending money that they would any way and eventually, they would be treated to a free trip. Unfortunately, about 68 per cent of people surveyed faced irksome situations when it came to cashing in their points, according to a recent survey conducted by Capital One Canada.

Some of the major issues include hidden fees, blackout dates and the lack of flight availability.

But there is one ray of sunshine within this survey, apparently credit card companies and airlines are changing their ways since customers aren't afraid to walk away and switch card providers, says the survey.

With many travel reward cards to choose from there's lots to consider including annual fees, extra benefits, such as car rental or travel insurance, interest rates, where you can collect points and how quickly you can accumulate points. Most importantly, you should consider any details about the redemption process, such as if there's an expiry date on using your points, and how many points you'll need to redeem for a flight to wherever you want to go.

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October 17, 2021

Why your budget may not be working

Got that nagging feeling that you’re just not doing enough to manage your money? You’re probably right, which leaves you with two options. Keep writing cheques and melting plastic until your money runs out, or get a handle on things right now by establishing some sort of spending plan.

A reasonable spending plan can provide a shot in the arm for many households – particularly those where there are dissenting views as to where the money actually goes.

Once you've decided how much your family is likely to burn through in big-ticket categories like cars, housing and food, then you can work towards either predetermined savings goals or emergency planning.

Here's one story of how someone ended up suddenly without a job -- and without a firm idea of his household’s spending.

The important thing to remember is that money is fungible, maintains economist Emily Oster. In reality, all dollars are the same. There is no such thing as a gas dollar, a grocery dollar, or a “fun” dollar.

So simply slotting expenses into envelopes depending on what you think you might spend may actually hinder you in the long run since it doesn't allow for much flexibility.

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September 30, 2021

Are joint credit cards ever a good idea?

Linking your credit with another person's credit always has the potential for risks and rewards.

Joint credit card accounts were once quite popular, since they allow couples to share cards, giving  stay-at-home partners with little or no income access to credit since the account is in the names of both people.

But one income families are the exception these days, with the result that some issuers are turning away from joint accounts, arguing that they no longer fit the times.

What's more, since credit issuers in the U.S. are no longer allowed to use income as a factor in rejecting a credit card application, most vendors have simply lost interest.

Shared cards might work where both parties have conservative spending habits, compatible financial goals and are truly committed to each other. But that doesn't always happen. It might be obvious to you which expenses should be put on the card and which shouldn't but one person's "obvious" may be another's "I don't see the problem!"

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August 14, 2021

Consumer proposals slowly replacing bankruptcies: report

Having lost a bit of its stigma, declaring personal bankruptcy has long been a viable option for people sinking under the weight of unmanageable debt.

So much so that roughly 118,000 Canadians went broke last year, according to the most recent statistics.

It may have a certain 'get out of jail free' appeal, but bankruptcy isn't necessarily an easy — or pleasant — fix for those who fall behind in their payments.

First off, you'll need to a hire a trustee to balance both your and your creditors' rights. Something of a referee, the trustee is there to make certain you understand the rules and that they're applied fairly.

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August 01, 2021

Stealing a PIN code is as easy as 1234

You work hard for your money.

So why put your finances at risk with a personal identification number (PIN) that's as easy as 1234?

A study by DataGenetics revealed that people are opening themselves up to identity theft and financial fraud by selecting four-digit PINs that are easy to crack.

When thinking of a four-digit password, many people opt for something that is simple and easy to remember such as a child's birth date, an anniversary or the year they were born.

However, there are over 10,000 possible combinations the digits 0 to 9 can be arranged to create a four-digit PIN code, according to the research.

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July 31, 2021

Canadians now able to pay with credit card at U.S. gas pumps

Travelling to the US this summer? You'll be happy to hear that gas prices are still about 20% less than we’re paying here. Unfortunately, you may need stacks of cash to buy it.

Billed as an effort to combat card fraud, more and more ‘Zip Code-required’ gas pumps have been popping up along U.S. highways. 

The ZIP-code pump creates hassles for Canadians as it doesn't recognize Canadian postal codes, which include letters as well as numbers. As a result, drivers have to prepay (on-the-spot refunds if you guess wrong aren't attendants' top priority) or leave a credit card inside before filling up.  

But help is at hand, at least in many states. 

When prompted, Canadians can now enter the three numbers in their postal code, and two zeroes. So, if your postal code is A2B 3C4, you enter 23400 and roll on out.

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July 24, 2021

More Canadians carrying debt

Nothing can be said to be certain, except death and taxes...and now debt.

According to a new report from BMO Bank of Montreal, more Canadians are carrying a household debt load (83 per cent) compared to 74 per cent in 2012.

The survey found that mortgage debt was the main source of debt for many Canadians followed by car loans and funding education.

The study also found that the average monthly debt payment has declined, dropping from $1,138 to $986.

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June 20, 2021

Do you really care if you die in debt?

Do you care if you die in debt? According to a recent Sun Life report, roughly 27% of Canadians couldn't care less -- which is bad news if you're one of their creditors and likely worse if you're one of their beneficiaries.

Borrowers face three types of creditors, explains Sun Life's Kevin Press: "Preferred creditors (Canada Revenue Agency is an example); secured creditors (like the bank that’s holding your mortgage loan); and general or unsecured creditors (everybody else)."

Preferred creditors get paid first, followed by secured creditors and then unsecured creditors, he explains. If there aren’t enough assets to pay everyone off, then somebody gets left holding the bag -- and that's certainly not going to be the government.

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April 16, 2021

Do you think you'll be able to retire debt free?

Retiring debt-free used to be the goal for all Canadians. Pay off the mortgage, no more car payments,  and use credit cards judiciously, if at all. After all, living on a fixed income leaves little or no room in the budget for making interest payments.

Looks like that's strictly old school, however, according to a recent study

The study, conducted for the Investor Education Fund, found that 24% of the homeowners expect to have at least some debt on their home after they retire. What's worse, most of them admit that they don’t really know how they'll pay it off.

That's not completely surprising, however. More people are working well past the traditional retirement age. At the same time, the age of first-time home buyers has increased sharply, leaving them with fewer years in which to pay things off.

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March 29, 2021

Don't break your budget for Easter

1391192_20157018Eggs...check. Baskets...check. Chocolate...check. Presents...check. Budget...what budget?

Believe it or not, Easter is the second biggest gift-giving holiday occasion for Canadians next to Christmas.

From organizing an Easter egg hunt for your kids to buying gifts, flowers, food, candy, visiting relatives -- it all adds up. And, if you didn't already have it included in your annual household budget you may be stretching it a little bit.

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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...