Category Archives: Money

I Became a Credit Card Junkie!

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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.

New HSBC Premier World MasterCard Canada

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Seems that HSBC Bank Canada is offering a new creditcard, called the HSBC Premier World MasterCard.  My initial review shows that this World MasterCard offers a better rewards/cashback then the regular HSBC Premier CreditCard.

HSBC Premier World Rewards Program

  • earn 2 reward points when you make purchases in foreign currency; 1.5 reward points for gas, grocery and drugstores purchases

HSBC Premier World Cash Back

  • earn 2% rebate on purchases in foreign currency; 1.5% rebate on gas, grocery and drugstore purchases.

The Regular HSBC Premier Rewards/Cashback only provides 1 reward point or 1% cashback for purchases

To qualify for the HSBC Premier World MasterCard, there seems to be an extra requirement to have a minimal gross personal income of $60,000 or a min annual gross household income of $100,000, in addition to be a HSBC Premier Client (maintain $100,000 in combined personal deposit and investment balances with HSBC Bank Canada).

There is no annual fee associated with the Card; and there is one additional bonus that sets the HSBC Premier MasterCard (World and No World) apart, which is the Travel Protection of up to $1 million for cardholder, spouse and dependent children travelling with you; coverage for unlimited trips of up to 17 days per trip.

When they talk about special discounts for HSBC Premier Privileges, its really not even worth looking at.   I tried to click on the link on their site for the Premier Privileges Canada and got a dead link!  Don’t worry  about it, there are no ‘discounts’ in Canada as we are not a “Popular Destination”.  Perhaps if you do alot of travelling, it may be worth looking into.

Learn about how I got rid of my CIBC Aeroplan Visa card and switched to a cashback program. 

Compared to my Amex Costco Cashback card:  You can get 3% rebate on eligible restaurant purchases (try finding a restaurant that accepts Amex); 2% rebate on gas purchases; 1% rebate on everyday purchases (Levels start at 0.25% up to $1000; 0.50% on next $2000; 1% on any amount over $3000).

Note that when you use a Canadian credit card for a foreign transaction, it adds 2.5% in addition to the exchange rate at the time of the transaction.  The HSBC Premier World MasterCard gives you back 2% in rebate for these foreign transactions.  Therefore instead of paying 2.5%, you would be actually paying 0.5 %.  I got myself a BMO US Dollar MasterCard to use when purchasing in US dollars.  There is no currency conversion fees or exchange fees at the time of purchase.

My Credit Card strategy:

Four cards:

  • HSBC Premier World MasterCard
  • American Express Costco Cashback
  • BMO U.S. Dollar MasterCard
  • RBC Rewards Visa Gold
  1. If restaurant accepts Amex, then use AMEX Costco Cashback to get my 3% rebate; if restaurant does not accept AMEX, then use HSBC Premier World MasterCard for 1% rebate.
  2. Gas – use Amex Costco Cashback for 2% rebate
  3. Grocery/Drugstore – Use HSBC Premier World MasterCard for 1.5% rebate
  4. US Dollar transactions – BMO U.S. Dollar MasterCard
  5. Foreign transactions (other than US dollars) – Use HSBC Premier World MasterCard for 2%
  6. Costco Purchase – continue to use Amex Costco Cashback as they don’t accept any other creditcards.
  7. Other purchases – HSBC Premier World MasterCard for 1% rebate (no levels).  If I use Costco Amex, I would only lose out on $17 because they give less than 1% on the first $3000, 1% after your first $3000.  However you may also want to take advantage of purchase and extended warranty insurance for 90 days from purchase date.  The HSBC Premier World MasteCard purchase also doubles the original manufacturers warranty up to one additional year.
  8. My RBC Rewards Visa Gold seldom gets used; I would only use it if vendor only accepts Visa (ie, Olympics)  :)

What are you your credit card strategies?  Do you always search for the best reward/cashback programs?

Next post – I became a credit card junkie!

Sleepydad’s Dividend Paying Stocks

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I’ve been reading about dividend paying stocks recently from Young and Thrifty and Dividend Ninja and i would like to share with you some of the dividend stocks that I currently own.

  • iShares S&P TSX Capped Cmpst Indx Fnd (TSE:XIC):  Yield 2.37%
  • Fortis Incorporated (TSE:FTS): Yield:  3.72%
  • iSHARES SP TSX SMALLCAP INDEX FUND(TSE:XCS): Yield:  1.62%
  • Goldcorp Inc. (TSE:G):  Yield:  1.24%
  • Morneau Shepell Inc (TSE:MSI):  Yield: 6.83%
  • Husky Energy Inc. (TSE:HSE)  Yield 4.74%
  • Apple Inc. (NASDAQ:AAPL)  Yield: 1.75%
  • Royal Bank of Canada (TSE:RY):  Yield: 3.99%
  • Talisman Energy Inc. (TSE:TLM):  Yield: 2.09%
  • Potash Corp (TSE:POT): Yield 1.23%
  • Ishares SP TSX CDN DIVIDEND IDX FD (TSE:CDZ) :Yield 3.1%
(*Yields are calculated or from Google Finance)
Going back to the beginning (about 15 years ago), I started off with mutual funds for my RRSPs bought through a financial advisor.  After going through about two financial advisors (being dumped by advisors as they moved on and didn’t take me with them), we finally were shifted to an advisor that we seemed to like and thought we would go with her for the long term.
However after learning about their mutual fund fee structure: management fees, commissions, back ended loaded etc. I decided to get away from mutual funds and go for a cheaper alternative ETFs. However my advisor was not supportive of ETF, and I came to a conclusion that she wouldn’t be earning anything if i was to buy ETFs from her.  I started to become skeptical, but gave her the benefit of the doubt for another year or so.  But early last year, I finally decided to go on my own, I took my invested RRSPs out of her hands and into my own self directed RRSP.
Unfortunately, can’t say i’ve picked all winners for the preservation of capital.  My worst so far is Talisman (down over 25%) and iSHARES SP TSX SMALLCAP INDEX FUND (XCS) (down 10%).
Best picks are: Ishares SP TSX CDN DIVIDEND IDX FD (CDZ)(up 11%) and of course Apple (up over 30%) and their recently declared dividend.
I’m looking to pick up some stable American dividend paying stocks (ie, Johnson & Johnson, Procter & Gamble, etc.), however they seem a bit high.  Any others worth a look right now?

The RESP dilemma

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Image: t0zz / FreeDigitalPhotos.net

I think RESP’s are a brilliant idea, provided your children go on to post secondary education. Where else are you going to get an instant 20% on top of your investment for basically nothing? While I do think there is value in your kids having “skin in the game” so they don’t coast through school with no purpose, we’d also like to help out as much as possible so they don’t have to compromise on their education because of finances. Hey, if they get accepted into Harvard or Stanford, we’ll find a way to make it happen without creating a mountain of debt.

I’m not going to get into details about RESP’s, since there is a host of great info already out there, like Mike Holman’s Money Smart Blog. What I want to talk about is the conundrum of trying to come up with the scratch to contribute $2,500 for each of my two girls each year in order to take full advantage of the CESG. After paying for your basic necessities, mortgage, car, daycare, utilities, house/car/life insurance (I can go
on but will stop here), what’s left? What about other savings? I think the average DINK (double income no kids) these days has a hard enough time living paycheque to paycheque. Now add two little girls to the mix …

Now I know you don’t have to start contributing right away and can wait until the kids are older and hopefully don’t cost as much (no more diapers, childcare, etc.). But I’m a strong believer in starting early and using the power of compound growth. Plus people tend to get
caught in the “I’ll start later” trap and end up never getting to it, as there always seems to be something else. Granted I am writing this while Mrs. Popthoughts is still on maternity leave, so the reduced income only highlights the difficulty for us at the moment.

So despite telling you how hard it is, we’ve managed to find the means to sock some money away for the girls’ RESP’s, but it hasn’t been easy and we’ve used money that was gifted to them. How about the other parents out there? Do you feel your budget is as stretched as ours? Do you manage to put away enough for your kids’ education? If not, don’t stress, because you’re probably not alone.

A Real Winner at Playnow.com

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This post is not endorsed by Playnow.com – but you have to BE IN IT to WIN IT! But make sure you use your GAMESENSE!

Big win for me after playing blackjack PlayNow.com (operated by British Columbia’s Lottery Corporation (BCLC)). Playnow is only open for British Columbia’s residences, and if your ip address appears to outside of British Columbia, it seems like it gets blocked.

I’ll have to blame my friends for me signing into to the Playnow account; they were the ones who started to play Sport Action on Playnow.com, making small bets on hockey games during the playoffs last year. Of course, I had to join in on the fun! It was fun to bet a few bucks on 2-3 games as it made me follow some of the games more closely – ie, games that I would never care about like Carolina Hurricanes vs Nashville Predators. But when i have $2 (the minimum bet) riding on the game, it would make a bit more exciting!

Surfing around the other Games on playnow.com, there were many games that I wasn’t familiar about, which I also didn’t really care for learning. BlackJack was the game i know, and understand, and easy enough for me to play and to start playing online.

With my sports betting going up and down, I started to dabble into the blackjack, to get a feel of the play. When you play at the casinos, its more of a social game to play with others, and wait for the free gin and tonics that come by. At home, on playnow.com, its you vs. the dealer (computer); very fast and quick games – you can lose quite fast!

Since you are playing on the computer, you can stall. You can pause you game, come back the next day or next week to make that decision on hitting or standing or doubling. If there was computer malfunction, you reboot the web browser, log back in, and you continue where you left off. For example, if you drew a ’6′ and a ’10′ and the dealer drew a ’10′; you can’t just close your computer or browser down and forget that it never happened. When you log back in, its right back where you left off – go ahead, hit it! Go for the ’5′ for ’21′!

When you play at home, I found it easier to walk away. Whether you are winning or losing, its easy just to log out and continue on with your daily life. If you play a few hands and feel unlucky, just walk away with a small loss. At the casino, i feel like its harder to walk away. Especially if you are in Vegas, and you flew all that way. You have to wait for your friends anyways, so why not play more!

I was lucky enough to walk away with $800 from Playnow.com. I won over $900 over a two week period from playing online Blackjack. I cashed out immediately by sending the deposit to directly to my bank account. I’ve been ‘good’ as well, I haven’t been back to play since my winnings (over two months ago)

But I’ll be back….. one day.