The Best Credit Card for Canadians

The best credit card for you is the best credit card that you can qualify for.  This is true for almost everybody.  Why, because all you need to do is spend $325 a month on gas and groceries, to get ahead on any annual fee.  Seriously, if all you do is fill your truck up with gas, you should come out ahead with the best credit card that you can qualify for.
    You might not believe us, but let's run the numbers.  First off to keep it simple, we will ignore the cashback/travel rewards benefits on everything except gas and grocery stores.  Typically, a no-fee card, a card with a $39 annual fee and a credit card with a $99 annual fee will reward you with 1%, 2% and 4% cash back/travel rewards respectively.
    The no-fee card is our baseline, so we won't run the numbers on the no fee card.  The card with the $39 annual fee will reward you with an extra 1% on gas and grocery store purchases.  The point in which your extra rewards breakeven with the annual fee is $325 a month.  The numbers work like this; (1% extra x 12 months x $325) - $39 annual fee = $0.
    The card with the $99 annual fee takes even less to breakeven.  Still using the no-fee card as our baseline, you would need to spend $275 a month at gas stations and grocery stores to have your annual fee pay for itself.  The card with the $99 annual fee will reward you with an extra 3% on gas and grocery store purchases.  The point in which your extra rewards breakeven with the annual fee is $275 a month.  The numbers work like this; (3% extra x 12 months x $275) - $99 annual fee = $0.


Credit Card with Limited or Bad Credit

Credit Card

Annual Fee

Cashback / Rewards

Home Trust Secured Credit Card

$0

0%



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Five Simple Life Choices that Add up to over a $1,000,000.00

Making different choices and choosing different lifestyles can have a dramatic effect on your life.  Some basic choices can add a $1,000,000.00 (around $475,000 in 2016 dollars) to your net worth in your lifetime.


  • Getting the maximum cash back on your credit card;
  • Make extra payments on your mortgage;
  • Not carrying a credit card balance;
  • Keeping your investments cost down;
  • Buying a house instead of renting;

Getting the maximum cash back on your credit card

You can get the equivalent of 2.64 years of spending back with a 4% cash back credit card.  Some one that lives to the age of 84 and started using their cash back card at the age of 18, would get 2.64 years of spending in cash back.  4% cash back x (84-18 years) = 2.64 years of spending in cash back


Make extra payments on your mortgage

Even a 2.59% mortgage rate would need a GIC that pays between 3.2% to 6.3% to breakeven, depending on how much you earn and the province that you live in.  No risk free guaranteed investment can touch the benefit of paying down your mortgage.


Not carrying a credit card balance

Trying to get ahead while maintaining a credit card balance is next to impossible.  An unpaid credit card balance will even beat Warren Buffet from the first day he started investing in his company.  There is no way to get ahead with an unpaid credit balance compounding at 19.99%.


Keeping your investments cost down

Buying a high cost mutual fund over an ETF, can result in a RRSP with a 48% smaller balance over thirty years.  Every year the MER attacks your balance, compounding the difference between the two funds.


Buying a house instead of renting

The decision to buy or rent a house is one of the most important and emotional decisions in your life.  At first, buying is more expensive, but by the time you are ready to retire, you will have a paid off house and more than likely have a larger TFSA as well.  The early cost savings from rent is eclipsed by the savings of owning your own home later in life.



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