Some time ago, the Retail Council of Canada had gone to the Government Competition Bureau to fight the fact that credit card issuers force them to take every credit card offered, no matter what their discount fee. It’s about the $5 to $6 billion a year in fees for Visa and MasterCard. But they’ve now got a ton of higher-end cards with more perks. Well, guess who pays for those perks? Merchants through much higher credit card fees. And the Competition Bureau just ruled that’s just fine – and their reasoning is confidential. Two and a half years to make a decision and…can’t tell you why…
It made my head explode. Are you kidding me? Now, they claim it’s a regulatory issue for the government and….the Finance Department says they’ll study it. What that likely means is, we’ll stall until it dies off. What was the response from the card issuers? We’re please that we can continue to protect consumers from unfair charges. Hmmm…pleased to help consumers or pleased to protect $6 billion of income? Nice try.
Since we’re on the credit card theme, I received an e mail last week from someone pretty mad. Their credit card issuers dinged them for a $20 inactivity fee. Yup – it’s legal and can happen if they’ve disclosed it on the original application – and it’s getting more common. If you don’t use your card for a year, you may get hit for $10 to $25. Even worse, you may have your account closed out from under you. That’ll have a huge impact on your credit score – your credit rating. It’s another reason to always have two cards from two different issuers. One may get lost or stolen while you’re traveling and you’ll be stranded or one may turn on you and close the account.
To keep your credit card active and part of your credit score, you should use it twice a year. It doesn’t have to anything beyond $20 but it needs to stay alive and any activity will do that.
If you’re looking for a credit card or just want to compare your fees and/or perks to others, there’s a great interactive site at the Financial Consumer Agency of Canada. Here’s the link for it:
By the way: If you search by rate, there are currently 12 credit cards with interest rates under 10%! If you often carry a balance, that’s the only factor, along with no annual fee, you should input and decide on.
I hope by now you know my attitude towards credit card balances: Avoid them like the plague, because they’re a huge killer of your cash-flow and rob you from being able to put that money towards savings.
But I also know that stuff happens. And if you’re going to carry a credit card balance, here’s a new card promotion that just came out:
If you got a cool looking black envelope from Capital One, it’s worth digging out and looking through. Capital One has come out with a rate of 5.65% for a three-year term. After that, it’ll go to prime plus 0.9% and the card has no annual fees – that’s a BIG bonus!
As credit cards go, that’s about the best there is. Now it’s not for everyone, because they’ll be looking for an above-average credit score. I’m guessing 720 or higher. It’s not available on-line so you need to have the junk mailer or a reservation and access code if you are on the internet, or you can call their customer service 800 number and see if they’ll let you apply. On-line you’ll get an approval back in three to five seconds. It’s purely based on your credit score.
Customer Service number to call: 800 481 3239
Ask for the Prime plus 0.9% Platinum Card
If you’re on-line: go to: www.getmycard.ca and try using:
Reservation Number: 0010396010736445
Access code: 010603
Part of the reason for this great deal is that Capital One as well as MBNA and JP Morgan Chase aren’t part of the “big five no-service banks” and so they don’t have the access to millions of bank customers to market to. They have to get customers the hard way – one at a time. OK, other than JP Morgan Chase who handles the Sears Cards.
And one more thing: Don’t think Capital One is just a little player. They’re the ones with the endless commercials on U.S. channels: “What’s in your wallet.” And their CEO, Richard Fairbanks two years ago made – are you ready: $280 million in pay for a year.
Yes, there’s big money in credit cards. Unfortunately – it’s your money.