I continue to contemplate getting a new credit card to use in place of my GM Visa card despite the impact it would have on my credit score.  I wanted make sure this is the last time I need to get a new card for a very long time so I ran through a series of questions in my mind. These helped me sort out what was important to me and I thought would benefit others in deciding which card is suitable for them.

1. What cards do you currently have?
   Open your wallet and take a look at which credit cards you currently have. What you want to make sure is that you have the greatest amount of usability possible. If all you have is Mastercard or American Express then you should be looking at Visa to fill in the gaps. If you don’t have any credit cards then get a visa since they are accepted everywhere usually.
   
2. Do you normally carry a balance?
   If you don’t normally carry over a balance from month to month then the interest rate the card has doesn’t matter. If you do carry a balance on a regular basis then you will need to find a credit card with a satisfactory rate. If you’ve never had a credit card before then get one with the lowest rate since you don’t understand you’re spending patterns. As well look into the stipulations in which a credit card can raise its interest rates.
   
3. How much do you normally put on your credit card each month?
   Having an understanding of your credit card spending patterns lets you determine which credit card benefits program will be best suited for you. If you don’t use it often then the benefits are secondary concern and you should focus on minimizing your cost by getting low interest rates and not service fee.
   
4. Does your local grocery store have an affiliate credit card?
   People tend to shop at the same grocery store and some of the major chains have affiliate credit cards. The rewards could be substantial and a good place to start looking for a new card.
   
5. Do you rent cars and how often in a 1 year span?
   If you rent cars on a regular basis then there are credit cards out there that pay some of the insurance as well as give discounts with particular rental companies.  Insurance can cost as much as $40 dollars a day.
   
6. Do you travel and how often?
   Take a look at how often you travel. There are credit cards that are travel focused. They offer discounts with airlines and hotels. They can pay for things like travel health insurance and cancellation insurance. As well they can also offer free upgrades and points towards additional flights.
   
7. Would you prefer a cash back option instead ?
   There are credit cards that will give a percentage (usually 1-3%) of the money you put on the card as a cash back reward at the end of the year. If you answered no to the 3 previous questions then this could be a valid rewards option for you. Just get back cash and spend it where ever you want.
8. Would you be interest in concierge type services?
   If you frequent concerts and enjoy the theater then there are cards that focus in this area. Some will give discounts and others will provide front of the line services when ordering tickets. There are also cards out there that have nice rewards programs and offer the concierge service as a secondary feature. If these things are important to you then you may want to look at getting a card with these features.
9. Would you be willing to pay a service if the cost was covered by the above savings ?
   This is a very important question and you will need to run the numbers to make sure. Based on your usage and the savings/rewards that the card offers it might be worth it to get a card that charges a yearly fee. Generally speaking though if you’ve answered no to a lot of the questions above or don’t expect to use this card often then it’s probably best to get a card with no fees.

Are there other things someone should consider when deciding on a credit card?

-mfd-

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I currently have 2 credits cards. I have PC Financial Mastercard which is our joint account. I’m not sure what the interest is since we never carry a balance and we collect the points towards food. My second card is a TD GM Visa Card. Now I’m not happy with this card because of the rewards it offers. As I make purchases on the card I earn money towards the purchase of my next GM vehicle. This is great except I’m probably never ever going to buy a new car and if I do it most likely won’t be a GM. So I’m now beginning the wonder if I should be moving over to another credit card for a better benefits program.

TD GM Visa Credit Card Features

Annual Fee: None

Interest: 19.75%

Primary Benefit: The card offers 3% back in GM Card earnings which can be used to purchase a brand new GM car. (e.g. I spend a $1000 dollars and I get $30 to put towards a GM car)

Secondary Benefits(A): Preferred rental rates with Budget Rent A Car

Secondary Benefits(B): You, your spouse and dependent children are automatically insured while traveling on a common carrier (Bus) or in a rental car whenever you charge the full cost of your ticket or car rental to your eligible TD Visa Card.

What I like about the card ?

I like no annual fee. The interest rate doesn’t bother me since I rarely carry a balance. However I did call TD once to try and get the rate lowered and they said I couldn’t do that with this card. Does that sound right to anyone else? I also like that I can transfer GM rewards to close family members like your wife, kids, parents, and siblings.

What I don’t like about the card?

I don’t like that I can’t get a lower interest rate. However, I mostly don’t like the benefits. Like I mentioned previously I have no intention of purchasing a GM now or any time in the future. I need a card that gives me rewards that I can use like real cash back or points to buy food.  As for the secondary benefits….I already have insurance and I never rent vehicles.

Concerns

I only have two concerns about switching. The first being what do I do with my $900 dollars in GM earnings? Unfortunately, I also don’t know anyone currently in the market for a new GM. I do have a few people who are currently leasing though but I can’t apply these earnings towards the purchase of a lease because it’s considered a used vehicle purchase. I hate the thought of wasting 5+ years of accumulation.

The second issue is my credit score. Last year I applied for 3 new forms of credit and my fico score took a hit. Its begun to recover and the last thing I want to do is take another hit.

There you have it. Do you think I should get a new credit or just live with the crappy benefits?

-mfd-

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Recently I’ve been on a quest to cancel all of my unnecessary expenses. This week it was the balance protection on my Visa. It was one of those relics from my youth that sounded like a good idea at the time. Its never really bothered me before since I rarely used my Visa. My America Express Platinum charge card was my primary card (I know, I know I’m a fool for paying that $400 yearly fee). Now that my AMEX has been canceled the Visa balance protection has caught my eye.

For those of you who don’t know, balance protection will make your minimum payment if you become disabled because of accident or illness and you are unable to work. As well if you find yourself out of work, through no fault of your own. However this will only last up to a maximum of $10,000 or 24 months, which ever comes first. Now the silver lining is they’ll pay the entire balance should you find yourself diagnosed with a critical illness or die. All this wonderful coverage can be had for the low price of $0.89 per $100.

The biggest benefit of having a credit card is that it’s pretty much a 1 month interest-free loan. Responsible credit card users take advantage of this by paying off the balance each month and earning the rewards the card provides. However even if you pay off the balance each month you still have to pay the balance protection. On the surface the cost doesn’t seem all that bad, just a mere $0.89 per $100. If you annualized the cost it comes out to $10.68, which is nearly 11% interest. There goes our interest-free loan. The interest on this card is about 20%, add on the balance protection and now you’re up to 31%. No, No I couldn’t have any of this (especially since I’ll be carrying a balance for the next 2 months to meet my RRSP goal). Time to call the credit card issuer and cancel.

I can honestly say that credit card issuer was really concerned about my decision to cancel the balance protection. First they asked that I give it a couple of days and sleep on it. Next they started to read out five alternate plans that they offered. Then they wanted me to read over the literature of my existing plan just to make sure. Finally he re-iterated how concerned he was should I have any untimely mishaps. All in all it took me 15 minutes and a bit of frustration with the call but in the end I was left with a sense of relief to get this added expense canceled.

I’m just curious about other peoples experience with “forgotten costs” and if they were pressured to continue paying them?

-mfd-

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