How would you like to have a City of Kelowna credit card? Imagine the Visa logo and maybe a nice picture of Hwy 97 heading into Kelowna with all those billboards and the bridge in the background? If you think that’s a joke – well, it isn’t.

Late last year, the town of Gibbons, Alberta (just north-east of Edmonton) started the process of having a town credit card. It’ll take provincial and federal legislation but they’re studying it. You have them, or have seen them from Starbucks, Walmart, Costco and tons of others. Now towns and cities want them as a money maker for the town or city. The card will actually be in the name of the town and they’ll give you a so-called supplemental card with your name on it. Use it like a normal Visa or Mastercard. But the bill, because it’s in the name of the town, will go to them, and the town will pay it in full to make sure there’s never any interest cost.

You, however, then pay the town whatever you want. The town can borrow at the Bank of Canada overnight rate, which is currently 1.75%. Since half of cardholders don’t pay in full, the town will then collect the 13% interest on a low-rate card, and that’s the towns’ income. If there’s a default, they’ll be able to put a lien against your property, just like they do now when you’re in arrears on your property tax.

Gibbons has a population of only around 3,000 people. But their numbers crunching show they could make between about a million and $1.8 million a year in extra income.

Good idea or a minefield of potential problems?