Tag Archives: Target Visa

A New Tim Horton Visa Card

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Affinity cards are regular Visa, MasterCard or American Express cards, but they’re issued in conjunction with a company or organization. You can get a University of Vancouver MasterCard, a Target Stores Visa, a Shoppers Drug Mart card, or even a Justin Bieber pre-paid credit card…with a ton of fees. The Kim Kardashian card was pulled off the market as lawsuits started with all the fee traps…but I digress…

As of last week, there is now a Tim Horton CIBC Visa card. With 3,500 locations, the marketing for this card is all over their stores – inside and out. If you’re one of the 5.3 million visits a day, you’ve probably already seen it. CIBC needs the business as they lost half a million cardholders to the TD last year, and Tim Horton will get a big kickback on every charge made.

Yes, I actually read the 12-page disclosure because you aren’t going to…you’re welcome. This is a normal Visa card with a 20% interest rate and no annual fee that you can use everywhere Visa is accepted. The perk, or reward, on this card is that 1% of your purchases can be redeemed at Tim Horton for coffee, or anything else. Since Tim Horton sells over 2 billion coffees a year, I’m sure they can afford some freebies.

After a year of work and research, it’s the first credit card with a blinking light. If that excites you – I’m not sure why. One light will blink if you’re using it as a regular credit card and a second light blinks if you’re using it at Tim’s to redeem your rewards.

Who should consider getting this card? That depends on whether you want to get free coffee, regular price coffee or pay around double the price for your coffee:

If you run a credit card balance: You need (not want) a low interest rate card. There are a half dozen in Canada, including the Scotia Value Visa. You’re way ahead of the game at a 12% rate versus 20%. If you don’t, your so-called free coffee reward will actually cost you double with the extra interest you pay.

If you charge a lot but always pay off your card, you want a reward card with 1.5% to 2% perks. You can get 50% to double the rewards with other cards if you shop around. A listener e mailed me last week. She runs $55,000 on her card a year and pays it off monthly. She shouldn’t chase $550 of free coffee when she can get $1100 of other rewards.

If you charge maybe $500 to $1000 or so a month, and pay off your card, you’re not likely to reach any huge rewards with another card. If you like Tim Horton, this card may be for you. At least you’re getting some return for your spending.

Two more quick things:

As with any credit card, you’re playing with fire and one day you will get burned – it’s just a matter of when, and not if.

One day, I want to issue a new Visa card. It’ll have audio with it, and not just a blinking light. When you use the card it’ll say: Your balance is already $3485.00 are you sure you want to make another charge that you won’t be able to pay off anytime soon?

New Debit Card Fees & Some Bank Insights

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Last week the federal government announced a discussion period for some prepaid credit card changes. They’re most welcome and long overdue, but they sure don’t go far enough. What the proposed changes include are:
-No expiry for prepaid credit cards
-Fees must be prominently disclosed in advance of purchase
-No maintenance fees for at least one year.

Now help me with this? When are these things a problem when you have cash? Right – they never apply! It’s ok to charge a monthly maintenance fee after a year? What? Does cash expire in the same way? With cash, do you have to look for the traps of fees? Enough said…

There is also a bunch of news from the world of our no-service big six banks:

Scotiabank is now marketing American Express Gold cards. They’re the only Canadian big bank and it’s not the real Amex charge cards, just the Gold credit card with travel points. It’s nice to see the market expanding and they’ve sure done a lot of advertising for it!

The TD had a big announcement last week: They are buying the US credit card portfolio of Target. The total of Target credit card balances is just under $6 billion and the deal is for seven years. That likely means TD will handle the Canadian Target Visa cards when they launch in Canada in March. And, as we discussed a few months ago, the rumour is that Canada will also have the permanent 5 percent discount on any shopping with their Visa card. So skip the Amex Gold and wait for the Target Visa if that’s true.

The Royal, also last week, purchased the Canadian operations of Ally Financial. Do you remember GMAC? It was the finance division of General Motors and THE most profitable part of their portfolio. No wonder when most people finance and don’t shop around for their loan. Well, GMAC was sold when GM was in big trouble. Then they got into even bigger trouble with the US financial meltdown and the government allowed them to convert into a bank. That became Ally, which is now part of the Royal. It’s still massively profitable and the Royal outbid 15 companies and paid $3.8 billion.