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Email this11:14 am
December 4, 2016
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http://weeklynews.ca/is-your-c.....-it-means/
The title (I chose) is from the body of the article not the articles title.
It is something I wish Canadian CCs would pay attention to. Many CCs are going towards larger benefits packages and less about rewards.
Really only Rogers did and is doing that. They are actually cut back on Benefits and had large Cashback perks. Which still exists for their basic cards and was formally what they did with their main card. It's good to see American companies eliminating selling features like benefits and are instead giving cash back perks instead. Like Rogers did.
One reason companies in Canada and America have bloated benefit packages is because people simply don't care as shown by a recent report cited in the article:
"52% off cardholders reported they “know little or nothing” about the extra features."
"80% of cardholders are “unclear” about the benefits of their credit cards"
About 50% of people just don't care about card features. Well only 20% of people said they actually knew what their benefits were.
Does this apply to Canada? Probably similar results I would think.
She suggests that companies add more and more benefits as a jargon tactic. Empty benefits that make it look like you're getting a lot from your card. When in reality it is very difficult to impossible to actually use or get some of these benefits.
She points out price protection and actually explains why this is the case with this benefit. It is more of a selling point to the card rather than an actual useful benefit that people actually use.
This is a really well written article and wish our media would have articles like this. Right now, they are often just a bull horn for the companies without any opinion or good examples of what point they are trying to get across. If they have a point at all....
1:45 pm
October 21, 2013
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I'm sure it's true that most people don't ever use most of the benefits associated with their credit cards here as well. There is a reason for that, of course.
They sometimes change the benefits, insurers and/or or policies without telling you. And, in my experience at least, they never send you the new package of insurance details, which usually have changes in them. You have to sit on the phone for a while to get them to send you updates - if you should think of it. People don't use them for a reason: they are difficult to keep track of, there is too much fine print which essentially negates the policy for practical purposes, and many of the insurance policies are secondary (meaning that you must first claim on your own insurance before you can get any benefit).
In addition, the paper work required to make a claim is typically onerous, requiring documents that people can't find or have thrown out, and adhering to strict deadlines. People learn from their negative experiences.
In other words, the CC companies have created a situation where these benefits aren't very useful, and, lo and behold, people don't use them!
People do use the rewards and do appreciate the no-fee cards because these are tangible benefits that you can keep track of easily and get the benefit from.
From what I've seen, many Canadians, especially those who don't own cars at all and thus do not have any primary insurance, rely on the car rental CLD insurance. Most will never make a claim on it, so the CC issuer may not know if they intentionally "used" it or not.
For a number of years, we rented extensively and this perk saved us from spending thousands of dollars, but we never made a claim. We made sure our card offered primary insurance.
To summarize, I think people do use the perks that work. The ones that aren't being used are the ones that are structured to not work well and are thus no longer a selling feature. Might as well get rid of them.
The question is, would we really see any significant improvements in lieu of what is being dropped? In my opinion, perks have been going down among Canadian credit cards, not improving. Virtually every card (if not every card) has dropped its cashback rate of return in the last few years or they have reconfigured them so that the good rates only apply to the minority of purchases.
It's true that most Canadian reviewers don't really look at the fine print or do a critical evaluation. Some articles are taken directly from US wire services and are next to useless and often misleading. Consider the source!
2:10 pm
December 17, 2016
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I just have 2 plain Jane CCs from my BIG 5 bank - one I use exclusively for pre-authorized payments the other for everyday use. I think the cards provide for rental card insurance (which to date I haven't tested) and that's it - no cash back, no points just the privilege of using them.
We haven't paid any attention to cards that offer travel insurance that may cover pre-paid hotels opting instead to just pay the posted rate at booking payable at the hotel - reason being is pretty simple - I don't think changing your mind on that hotel or that holiday counts as a reason for insurance companies to cover the losses on pre-paid, non-refundable hotel bookings.
I am getting a kick out of reading RFD and the pros and cons of Brim and Home Trust credit cards.
8:42 pm
June 3, 2015
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Top It Up said
I am getting a kick out of reading RFD and the pros and cons of Brim and Home Trust credit cards.
Wow...you must have a lot of time on your hands.
Tangerine....Canada's best bank. LBC.............Canada's 2nd best bank.
Hubert.....worst bank in Canada.
4:47 am
December 17, 2016
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Joe said
Wow...you must have a lot of time on your hands.
Yeah, it takes me all of about 2 minutes to read the latest posts to the thread ...
NOW people swimming their way through using 10 different credit cards in their daily lives ... those are the ones with time on their hands ... churning, churning, churning.
9:29 pm
December 4, 2016
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Top It Up said
Yeah, it takes me all of about 2 minutes to read the latest posts to the thread ...
NOW people swimming their way through using 10 different credit cards in their daily lives ... those are the ones with time on their hands ... churning, churning, churning.
Top It Up said
I just have 2 plain Jane CCs from my BIG 5 bank - one I use exclusively for pre-authorized payments the other for everyday use. I think the cards provide for rental card insurance (which to date I haven't tested) and that's it - no cash back, no points just the privilege of using them.We haven't paid any attention to cards that offer travel insurance that may cover pre-paid hotels opting instead to just pay the posted rate at booking payable at the hotel - reason being is pretty simple - I don't think changing your mind on that hotel or that holiday counts as a reason for insurance companies to cover the losses on pre-paid, non-refundable hotel bookings.
I am getting a kick out of reading RFD and the pros and cons of Brim and Home Trust credit cards.
I would stay away from BRIM. They have had major launch issues. Which would scare most away.
Maybe in a few years they will get their act together but right now they offer nothing that other cards don't already have.
HT also is usable at Costco US. Which is a major advantage for some of us.
9:41 pm
December 4, 2016
Offline
Loonie said
I'm sure it's true that most people don't ever use most of the benefits associated with their credit cards here as well. There is a reason for that, of course.They sometimes change the benefits, insurers and/or or policies without telling you. And, in my experience at least, they never send you the new package of insurance details, which usually have changes in them. You have to sit on the phone for a while to get them to send you updates - if you should think of it. People don't use them for a reason: they are difficult to keep track of, there is too much fine print which essentially negates the policy for practical purposes, and many of the insurance policies are secondary (meaning that you must first claim on your own insurance before you can get any benefit).
In addition, the paper work required to make a claim is typically onerous, requiring documents that people can't find or have thrown out, and adhering to strict deadlines. People learn from their negative experiences.
In other words, the CC companies have created a situation where these benefits aren't very useful, and, lo and behold, people don't use them!
People do use the rewards and do appreciate the no-fee cards because these are tangible benefits that you can keep track of easily and get the benefit from.
From what I've seen, many Canadians, especially those who don't own cars at all and thus do not have any primary insurance, rely on the car rental CLD insurance. Most will never make a claim on it, so the CC issuer may not know if they intentionally "used" it or not.
For a number of years, we rented extensively and this perk saved us from spending thousands of dollars, but we never made a claim. We made sure our card offered primary insurance.To summarize, I think people do use the perks that work. The ones that aren't being used are the ones that are structured to not work well and are thus no longer a selling feature. Might as well get rid of them.
The question is, would we really see any significant improvements in lieu of what is being dropped? In my opinion, perks have been going down among Canadian credit cards, not improving. Virtually every card (if not every card) has dropped its cashback rate of return in the last few years or they have reconfigured them so that the good rates only apply to the minority of purchases.
It's true that most Canadian reviewers don't really look at the fine print or do a critical evaluation. Some articles are taken directly from US wire services and are next to useless and often misleading. Consider the source!
If AMEX SC dropped all of it's benefits and funneled that to it's cash back. They would likely be able to offer a 1.75 flat card with no fee. Benefits are about 0.5 percent I would imagine.
Look at Walmart. No Benefits. 1%. Compared to most bank cards at 0.5% which usually have some benefits.
AMEX gets a much higher percent, than MC or VISA. If they went flat percent back like Rogers and just got most of their profits from those that carry balances.
They likely could offer a 2% flat CB card with no annual fee.
They do not because they can make way higher profits from taking profits from multiple areas and confusing consumers.
Here is AMEX interchange fees:
https://www.helcim.com/us/american-express/
Didn't know they charge flat 10 cents on transactions on top of the percent.
Anyways, that is what I used to estimate they could offer a 2% card with no fee.
10:16 pm
October 21, 2013
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I doubt they figure it out this way though.
In the end, as you said in another post recently, it's about profit, not coming out even.
The goal is always to make even more money than whatever they're making now. In order to do this, they must have some combination of more cardholders, more transactions, more retailers, more expensive transactions, and/or higher fees, and lower operating costs; and they must do it in a way that makes them look more attractive than other cards, on the surface. That's where the add-ons come in. These need to be attractive to consumers.
10:05 am
February 18, 2016
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Lets hear how many of you used 'purchase extended insurance' or 'mysterious disappearance' features of your CC.
How many hoops you had to jump through?
Just give me good cash back and I do not need anything else as getting that 'anything else' will cost you your sanity and wasted life getting it.
Please write your comments in the forum.