7 articles Credit cards Page 2 / 2

When searching for a Canadian personal credit card, there are tons of options without annual fees. I can then pick and choose from those options for the one with the best rewards structure.

When it comes to a business credit card, however, the options are a lot more limited. A good place to start is the RedFlagDeals.com credit card directory.

I run a relatively small web development company and 3 of us needed to have credit cards. Mainly, we wanted to simplify the administrative hassle around continuously writing cheques to reimburse our business purchases, which include travel expenses, equipment and supplies, external services, and meals and entertainment. After a rather thorough search, we ended up choosing the CIBC bizline VISA. Here’s why:

No fee

The annual fee for the CIBC bizline VISA is $0. You can have up to 9 additional cards at no extra charge.

No rewards or points

Generally, getting rewards from a credit card is considered beneficial. But after we weighed the fees (no matter how nominal) against the rewards on other cards, it simply wasn’t worth the administrative effort to us. Accounting for the fees and managing and using the points, not to mention any possible taxable benefits coming out of the rewards if awarded for personal use, actually seemed like a cost.

Without rewards, we can keep the purpose of the cards simple and as intended.

Accepted at many places

While American Express has a few tempting cards, for the purpose of putting as many business purchases as possible on a card, VISA and MasterCard are simply safer bets.

Consolidated statements

With the CIBC bizline VISA accout, each cardholder gets his/her own card and card number in his/her name. However, all cards on our account are tracked on the same statement. This contrasted with some other cards we looked at, where each card had a separate statement. We’re small enough that we can quickly tell which charge was by who and for what, and it is administratively easier to only have to deal with one statement.

An added bonus is that the CIBC online interface is quite nice to work with.

You can even break down transactions by type:

Simple application process

You can apply for the CIBC bizline VISA completely online. The process took less than ten minutes for us. It asked for information including:

• Primary cardholder’s address, phone number, date of birth, and income
• Additional cardholders’ address, phone number, and date of birth
• Business information: years in operation, annual revenue, business type, nature of business, primary bank

We received our cards about two weeks later.

When we had previously investigated getting credit cards through our primary financial institution (not CIBC), they wanted us to go into the branch, fill out significantly more information, and do credit checks on all of us. To be fair, that was not the main reason why we went with the CIBC bizline VISA (and we didn’t have anything to hide), but it didn’t help.
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Miscellaneous details

• The CIBC bizline VISA comes with a PIN, which is the first time I’ve ever had a card with a PIN. Extra security, but also an extra number to remember 🙂
• We don’t ever intend on using our cards for actual credit loans, but the interest rate on the card is between 1.5% and 11% above CIBC’s prime rate.
• The card doesn’t include many insurance benefits. However, for things such as travel medical insurance, we use our normal benefits provider.

As a whole, the CIBC bizline VISA is simple and straightforward. Several of us charge our business purchases to it, and we pay it off every month. That’s it.

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Credit cards can play an important role in your financial portfolio. There are many credit card programs out there willing to give you free stuff for using their cards. Using a credit card more than a debit card often makes sense these days given that a lot of chequing accounts have limited use amounts for debit transactions to avoid fees.

If you carry a balance on your credit card then the first priority for picking a card should be ones offering low interest rates. The potential points you could earn are not worth the interest fees you will be charged. I will not be addressing low interest fee cards in this post — only ones with a points system (usually meaning high interest rates).

When picking a credit card points system you need to cost out the reward you will receive in order to compare. If there is a fee associated with the card in order to receive the points program, in my experience, this never equals out to a financial plus.

I want to share a good points program card I have found in my research. It’s the CIBC Shoppers Optimum Visa card. You receive 3,000 bonus points for signing up and then receive 5 points for every dollar you spend. Interest rate is 19.5%. You also receive 50% more points when you use your card at Shoppers Drug Mart with your Optimum card. If you spend $15,000 a year on your credit card (which is the amount I was using to compare cards), you will receive 75,000 Shoppers points, this equals their highest reward level of $150. This reward ‘cash’ can be used to buy anything at Shoppers Drug Mart. You can likely earn more than just the 75,000 points for $15,000 because of bonus points and extra redeeming programs through Shoppers (for example at certain times of the year for the 75,000 points you actually receive a reward of $200). It gives you the most value to reach their highest reward level before cashing in, although technically you can start redeeming for ‘cash’ at 3,500 points (value of $5). See the regular points table here.

Points earned at Shoppers are good value for money for two reasons. First, items available for purchase at Shoppers Drug Mart are extremely varied (you have a lot of choice on what to buy). Secondly, although you can choose to buy ‘fun’ items you can also use it to buy necessary items that would already be in your budget, thus saving money (ex: toothpaste, shampoo, makeup etc).

Credit card point systems are most associated with travel rewards. However it can be to your advantage to search for cards giving you rewards at retail stores you actually use. At a $15,000 level of spending travel rewards points will just not offer you yearly value. It would likely take you 2 to 3 years to save up points to receive a mid sized trip. So although over the long run, you might gain more ‘cash’ value from these cards, the long wait before you can redeem does not always make it. If you have a higher level of spending you can put on your credit card, these travel programs may offer you more value. If you want to pick a travel rewards program you should pick one tied to an existing travel rewards entity (not a private one) – for example Aeroplan or Airmiles – this is because you will be able to earn points faster since you can earn in other circumstances such as when you take a flight that is not bought on points.

Some locations to start your research are CIBC (they offer a fairly large collection of cards with points programs) – and Citizens Bank (who offer some innovative points programs tied to charities).

The bottom line when searching out a credit card points system is to estimate how much you can put on a card a year, how many points that will earn you, and what the ‘cash’ value of those points are. This will help you make an informed decision and make your money do some work for you.

Forum/Topic	Started	Last post	Posts
Credit card reward programs Tangerine credit card World	January 19, 2021 3:16 pm by Max	November 30, 2024 5:33 am by fabafter50	22
Credit card reward programs Neo Financial Credit Card – Best Cashback Card	November 24, 2024 5:13 pm by Save2Retire@55	November 24, 2024 5:13 pm by Save2Retire@55	1
Credit card reward programs Rogers red world elite	November 13, 2024 7:32 am by Nomad	November 13, 2024 9:31 am by Norman1	3
Credit card reward programs PC Financial World Elite Mastercard: Minimum spend dropped	October 13, 2024 8:24 am by Norman1	October 13, 2024 8:24 am by Norman1	1
Credit card reward programs Bank of Montreal (BMO) US Mastercard: Annual fee grandfathered?	September 6, 2017 2:35 pm by Hmm	September 24, 2024 8:37 am by SuperSaver	22