As a follow up to my last post regarding the HSBC Premier World Mastercard, a question a reader asked was how i chose the four credit cards that I had….
My first experience with credit cards was back in University (about 20 years ago), where you had so many incentives and offers. I remember the days of my GM Visa card, where I was just happy to get a credit card that I would pay off every month to start building up my credit rating – I don’t think I was ever planning to purchase a GM vehicle.
I did end my buying a new car after I graduated with a car loan through (at that time) was just still Canada Trust. Having to want to pay back the loan and some student loans as soon as possible, some of the credit cards at that time had offers of six months no interest for balance transfers etc. I forgot what made me do that, but I started transfering my borrowed money from one credit card to another credit card to another credit card until i paid off my loans, so i ended up paying not that much interest at all. I think I had an AMEX, BMO card and perhaps a couple more. I felt like I became a credit card junkie!
Our CIBC Aeroplan Visa was my first joint credit card with my future wife, as we started to accumulate expenses for the upcoming wedding, but the annual fee was just horrendous. (you probably ready my post about this – http://yvrdad.com/after-10-years-its-time-for-a-divorce-you-are-costing-too-much/ ) I was just didn’t want a credit card that I had to pay an annual fee!
After being abroad for 3.5 years, when we returned to back to Vancouver, my wife had her personal accounts with CIBC and I had my personal accounts with RBC, ING, Canada Trust; so we decided just to consolidate everything into one. We chose HSBC Canada as main joint account. I’ve closed my ING, Canada Trust accounts, and downgraded my RBC account to a basic free account.
After we got rid of of the CIBC Aeroplan Credit Card, we started to use our Costco Cashback Amex Credit Card as our main credit card. – I use this card for work and I had recently received my cash back of over $700 for our AMEX spendings in 2012. I took my rebate to the counter at Costco and got my $700 in cash!
At that time, realizing that not all restaurants/stores take Amex, I had to find either a Visa or Mastercard. We were working our way up at HSBC, and had upgraded as an Advanced HSBC customer, so we also signed up for the HSBC Advanced credit card, choosing the Cashback option. By the way – Cash back earnings on our HSBC creditcard for 2012 was $120!
For the BMO US Dollar Credit card, it was actually Popthoughts that introduced me to the card. I use this card anytime I go to United States for shopping or buying online on US sites. Therefore I would save the Foreign exchanges rates and fees (usually about 2.5% of the purchase). This card has a $35 fee initially, but if you spend over $1000 US on the card throughout the year, they will waive the fee the following year.
Last Spring RBC was offering a low rate mortgage of 2.99% for four years, where you can open a HELOC (Home equity Line of Credit), So, potentially needing money for a business and thinking that interest rates would be rising very very soon (still waiting for the raise of interest rates), we transferred our mortgage that I had with First National Bank (3.95% with one year remaining) to RBC. RBC paid all the fees (Lawyer fees, appraisals and other fees), where as I paid the mortgage penalty with First National. HSBC had a similar offer at that time, however they were not willing to pay the fees (lawyers, appraisal and other fees).
Going back with RBC and to be able to easily access the HELOC, we upgraded from the basic account to the no limit banking account. So to qualify for the multi product rebate for the account, we had to have a RBC credit card, and basic investment, so I put in $500 in a TFSA – RBC Fund which as risen 10% over the year – (perhaps I should have put in more money in there). For the credit card, I chose the RBC Rewards Visa Gold. This is the card that I probably have used once in the past year. However I did hear that the new RBC Target credit card offers 5% off Target Canada Purchases and is no annual fee. Therefore I may switch my RBC card to the RBC Target Card soon, perhaps I may get some more use out of the RBC credit card.
I have a friend who is a manager at RBC who says that the RBC Avion Cards are the best on the market, he may be right, but I just didn’t want to pay the annual fees. I have a friend who charges about $50,000 per month on his RBC and TD travel cards for business expenses; perhap its definitely worth it for those types of charges?
I also recently upgraded to the HSBC Premier status mainly because they offer their self directed investment via HSBC Investdirect at $6.88 per trade. So when they offered the HSBC Premier World Mastercard late last year, it just made sense that we upgraded our HSBC Advanced Mastercard to the Premier World Mastercard. As part of the Premier package, I also opened HSBC Canada US Premier chequing account, so I can write US Dollar cheques (to pay my BMO US Dollar credit card). But I also use this account for my US funds for my US Investments, as they offer free transactions; as opposed to the US Savings account, where they charge $1 per transaction.
My application is still pending for my US Based HSBC Premier Account. Its probably been about 2 months since my initial application, because the US side says i don’t have a good enough reason to open the US Based account. My HSBC relationship manager is working on this for me, I hope he comes through. However, i also found that TD offers the Cross border banking at TD Bank USA and RBC offers their RBC Access USA. From what i read on other forums, it seems quite simple to get.
What does sleepymom think of this? She’s sick of all the different credit cards, accounts, applications etc. But i think we have finally settled until the next deals come.