Credit Cards
When it comes to credit cards I would like to point out a few things where we need to change our mindset.
- Don’t be afraid of getting credit cards.
- Don’t be put off by annual fees. There are ways to reduce the annual fees and often the benefits you get from the premium cards are worth much more than the fee.
- There is no size fits all card. You need multiple cards for different categories of spend i.e. dining, groceries, filling gas etc.
- You will not ruin your credit score by applying for credit cards. If handled well you will improve your score. Then again, what’s the point of having a good credit score if you don’t use it to your advantage. Having said that, restrain from getting a credit card if you are about to apply for a mortgage.
- The best value of points is when redeeming for flights in premium cabins. However if you are comfortable in travelling in the economy or would prefer cashback, go for it.
Ways to reduce annual fees
There are a couple of strategies to eliminate or greatly reduce annual fees.
- Sign up when there are offers for First-Year Free i.e. no Annual Fee for the first year.
- Sign up for banking plan with your bank where they will waive the annual fee for up to $120 or subsidize by unto $120, E,g, TD Bank – If you have the “All-Inclusive Account” you can get a credit card with unto $120 free for not just the first year but for the duration when you maintain that account. CIBC Bank – If you have the “CIBC Smart Plus Account” you can get a credit card with unto $120 free for not just the first year but for the duration when you maintain that account.
- Apply through Great Canadian Rebates (GCR) and get a rebate cheque mailed to you. Create an account at Great Canadian Rebates by using the link below: https://www.greatcanadianrebates.ca/register/226943/ (If you use this link you can support by blog as I might get paid a referral)
e.g. American Express Aeroplan Gold which has an annual fee of $120 can be reduced by getting a rebate of $50 from GCR.