Tag Archives: MasterCard

Moving From Dot-Com to Not-Com

That was the headline in a really interesting recent Business Week story. Some of the biggest frauds happen by crooks sending spam email called phishing pretending they’re the Royal Bank, Paypal, investment brokers, and other trusted companies. In the last week alone, I received over a dozen. The common one is that there’s been unusual activity in my Bank of Montreal account. Click here and verify it wasn’t you. Well, I don’t deal there, but the crooks are sending millions of emails and lots of people do deal with them. The address shows something like Bank of Montreal fraud alert.com.

Everybody knows the dot-com addresses. The Bank of Montreal owns it. So when people see the bank name – or whoever – they think it’s legitimate. But some crook spent ten bucks registering something similar that’s not the real Bank of Montreal site.

Anyone can buy anything not already used ending in dot-com. That’s about to change: For almost $200,000 companies can now buy their name after the dot – instead of before. So you’ll soon see dot-bank of montreal or dot-Walmart. That makes it impossible for crooks to spoof the site and buy something to pretend they’re your bank, or whoever. It’ll be weird to type in accounts dot bank of montreal but it’ll totally protect companies from anyone else creating pages to imitate them.

These so-called self-branded domains have been sold to thousands of companies already. The first one has already converted: Barclays Bank shut down their Barclays.com and moved to home.barclays. Now customers will know they’re dealing with the real company.

And a moment of silence for some sad news: Visa and MasterCard aren’t happy…he says sarcastically.

Both Visa and MasterCard thought they’d experience a huge increase in business and profits with the drop of gas prices in North America. The logic from them, and from analysts, was that consumers paying a lot less for gas would get them to spend the savings on a ton of other stuff…on credit cards of course – massively increasing their profits.

It turns out that’s not happening at all. People are still charging at the pump. But lower gas prices equates to a lot lower amount for card issuers. That’s a lot lower amount for credit card issuers. However, the savings aren’t being spent! I think that’s great…the card companies don’t. MasterCard says it’s cost them 2% in total card spending and Visa says it’s had “a significant negative impact” on their business and profits. On the upside, the average chequing account balance for Americans is now over $5,700. They’re saving the money instead of heading for the mall!

Three Credit Card Updates and Heads Up

The Bank of Montreal has a new cash back World Elite MasterCard out that they’re promoting pretty heavily. The card has 1.75% cash back, which is pretty close to the best in the country.

I was all excited until I did 30 seconds of math. The rate and terms are pretty much the same as every other card, but it’s a $120 annual fee. So if you take $120 divided by 1.75, you need to charge just under $7,000 a year to only pay for the annual fee. That’s almost $600 a month before you even get a penny of actual cash back. So, unless you’re a huge charge and pay it in full every month, the card doesn’t make much sense for most people.

Did you take my advice two years ago and get a Capital One Platinum card if you regularly carry a balance? If so, you and I have been getting a rate of prime plus one percent all this time! A 4% credit card was something nobody else could match and would have saved you thousands of dollars in interest. But that’s come to an end. I just received their notice it’s changing to prime plus 7%, which makes it a 10% card. Still a good deal, but a 10 or 11 percent card is something you can get in a dozen others, including the Scotia Value Visa as an easily accessed one. Here’s the link to a federal government comparison site that’s really worth looking at: http://itools-ioutils.fcac-acfc.gc.ca/STCV-OSVC/ccst-oscc-eng.aspx   If you can’t grab the link, search for Financial Consumer Agency and then search on top for credit card selector tool. There are (right now) 26 cards at 12% or less and 12 cards under 11%.

When you get this, or any, rate changes on a credit card you have two options: Do nothing and take the rate increase. The second one is to call them and decline the change in the rate. If you do so, they’ll cut off your card for new charges, but you can take the forever plan to pay off your balance at the old rate, as long as you make the minimum payment. If you chose that, just make sure you get another card right away before this one shows a zero limit that will significantly drop your credit score!

Last week a relative was checking into a hotel in Prince George. The lady in front of him couldn’t get her credit card authorized. She had no idea why, and was quite rattled needing to get her daughter to find the cash. Here’s what you have to know if your card is a lower limit or near the maximum: Use your credit card at a gas station and they’ll put a $150 hold on your card. Even if you get $20 in gas, the hold comes off your available credit. Rent a car and they’ll typically put at least a $300 hold on it. Then, check into a hotel and they’ll typically do a $150 to $300 hold, depending on the hotel or how long you’re staying there. That’s even if you’ve prepaid through hotwire or priceline. Three stops and over $600 of your credit limits are used up for no reason and in the first hours of your trip! The block comes off usually in three to five days, but that’s a long time if you’re on holidays without a second card or the room on the one you’re relying on.

Dear RBC: What a Rotten Idea…

According to PIAC, we already pay over $700 million in paper statement fees in North America. And, since it’s summer again, it’s the bi-annual increase in service charges. Global Television had a big story on the Royal leading the way with their 18 million customers.

Have we just become numb to this, shrug our shoulders, and take it…twice a year? That’d be sad, but I have a hunch that that’s the case. The nastiest change by the Royal is that the seniors fee plans are changing from age 60 to 65. Great if you’re a shareholder because you get to rip off millions of seniors for another five years. That’s 60 more months of full service charges! The story featured one lady who has set up an appointment at her branch to see if she can get some fees waived. Sorry, lady – you’re wasting your time. The quote from the Royal was “we’re working hard to keep costs down.” That’s funnier than any comedy show you’ll watch this year.

What’s the behind the scenes reasoning for this one? We Canadians are slowing our borrowing down a bit. Maybe not by choice, but because we’re pretty maxed out. It’s also the result of a slower economy. Do you think banks are just going to see their income drop from interest income and not replace it somewhere else? The Royal already makes $1.5 billion in account service charges (2014). That’s 5% of all their income! Want to bet it’ll hit $2 billion this year if you don’t go somewhere else?

Why can the banks do this? Because they’ve made millions of you really sticky. That’s a bank phrase that they focus on a lot. When  you’re stuck – you don’t move elsewhere. If you have five dealings with a bank you’re so stuck, you’re not moving. A chequing account, direct payroll deposit, some RRSPs, a credit card, maybe a line of credit, and a mortgage, and they’ll likely have you forever! Then you’ll pay the increasing service charges, whatever fees they dream up, and take whatever bad service (if any) that you can get.

You’ll complain and moan. but you ain’t moving to a credit union. Your perception is that it’s too hard to move everything. It’s not! Get to a credit union TODAY. Open a chequing account and change your direct deposit. That’s the big step: Where your income is going. Then move your auto payments and you’re set. Oh, and while you’re there open up a Choice Rewards MasterCard, low-rate, or student card. No fees, no hassle, better and more flexible rewards, getting treated like an owner (because you are), and you’re never going to be charged a fee to enter a branch, or to pay your own payments down the road. It takes an hour of pain to move things around…for a lifetime of being valued for your business AND a rebate the end of year on all your dealings! My service charged went DOWN this month AND I got over $600 back in my annual profit sharing! As Nike says: Just Do It! Enough is enough! The government isn’t coming to help you here – so repeat after me: If it is to be – it’s up to me!

But part two is even nastier. The Royal announced they were thinking of charging their customers to pay their own Royal Visa payments, their loan payments, and mortgages. Yes, you heard that right. A service charge to pay payments for their own loans and credit cards. Last Friday they backed off. But you have to know this will come up again. How sick, sad, and just wrong!

The Federal Government has a long track record of not being big on helping consumers. They did force cell carriers to discontinue their paper statement fee. Yet they aren’t shutting down the banks from these rip-off fees that are probably a hundred times more than the little cell carriers and impact millions more people. Is it because Bay Street and the big no-service banks are some of the biggest contributors? You decide…

Visa And MasterCard Win Again

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.