A tip for finding the right credit card: consider one without annual fees.
I suggest this after reading the latest credit card customer satisfaction study from J.D. Power. Satisfaction among customers with a no-fee credit card is much higher than among customers with an annual fee. On a 1,000-point scale, no-fee cards received a customer satisfaction score of 747, while cards with fees scored 707.
Just over one-fifth of card customers surveyed by J.D. Power said they switched their primary card in the previous 12 months to avoid an annual fee, up from 16 per cent in 2020. The pandemic may help explain this trend – some households are struggling financially and need to cut costs, and others aren’t travelling and thus unable to make use of rewards generated by cards with fees.
Still, I wonder if there’s something to be said for a card that generates rewards without costing you annual fees that are commonly as high as $120 to $150 per year. Check out what’s available in the no-fee category on websites like CreditcardGenious, GreedyRates, Ratehub.ca, Rates.ca, Savvy New Canadians and Young & Thrifty.
The credit cards with the most satisfied customers come from Tangerine Bank, with a score of 822 out of 1,000. Canadian Tire and PC Financial were next with scores of 800 and 796. The industry average was 766. Have your say in what Canada’s best credit cards are by voting on the RewardsCanada website.
The biggest problem in customer service is no surprise – it’s bad service from call centres. J.D. Power said more card customers noted instances this year of “being transferred, put on hold, asked for the same information multiple times or having difficulties understanding the representative.”
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Rob’s personal finance reading list
Now’s an ideal time to renovate
The surge in lumber prices at the peak of the pandemic is over. If you waited, you win.
Best cashback websites
The Savvy New Canadians blog looks at ways to earn cash for shopping at particular retailers. Here’s a similar list from HowToSaveMoney.ca
Why it’s a good thing that stock trading is being treated like a game
A refreshingly contrarian take from a finance professor on the gamification of stock trading by millennials and Gen Z during the stock market rally of the past year and a half. He argues that turning investing into a game is part of a process that will make young people better investors over time.
Weird times in the housing market
All about a land rush in Peoria, Ill., a rust belt city that has seen better times. People from all over the United States have bought up houses, sight unseen. The reason: these cheap houses are their best chance at owning, and sometimes flipping, a home.
Ask Rob
Q: What is the cost of a financial planner? I was quoted $6,000-$8,000 as a base fee. I think this feels high.
A: Sounds high, unless you have complex needs in terms of family wealth – tax and estate planning, for example. In researching this column on the cost of a financial plan, I found that fees from planners often ranged between $1,500 to $4,000.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
The U.S. personal finance website NerdWallet has started a Canadian operation offering beginner-friendly information on banking, mortgages, credit cards and more to start.
The money-free zone
Rolling Stone has updated and freshened its Top 500 best songs list. More than half the songs didn’t appear on the old list.
Tweet of the week
The debt problems of the Chinese real estate developer Evergrande rocked the stock market early this week. Here’s a helpful thread to get you up to speed on the company and its current difficulties.
The lowdown on mortgages
What happened to those higher rates? What are the lowest rates right now? Where will they head next? Introducing the mortgage rundown, a new biweekly take on what’s happening in Canada’s mortgage market by mortgage strategist Robert McLister. You can read the first one here.
ICYMI
What I’ve been writing about
- Canada’s first ETF especially for retirees has been around for a year now: Here’s what we’ve learned about it
- What your family finances would look like if you were as casual about debt as the federal political parties
- The most overblown warning in personal finance has been that rising rates will crush borrowers
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Are your parents giving you money? • Why it’s time to stop shaming the renting lifestyle • Is now the right time to buy a house? • Why are young Canadians leaving the cities they love? • Eating in: How COVID has shifted our food spending • Crisis-proof your finances? • Can you afford to live downtown? • The cost of kids
- ✔️ The housing file: The housing boom is ripping apart the financial fabric of Canada • Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars • Big city housing affordability is over – now what? • She sold her Toronto house to retire somewhere cheaper, but it didn’t work • How young adults and the whole country win with a tougher mortgage stress test for home buyers • Can’t afford your house? It’s likely not your fault
- 📈 Investing: Robo-advisers have grown out of the novelty stage. Here’s help in finding one right for you • The 2021 ETF Buyer’s Guide: Best Canadian equity funds • The 2021 Globe and Mail online brokerage ranking: Who’s best for investing … and answering the phone • Are these the stock market returns of a lifetime? • On the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness
- 💰 Your money: The five most important numbers for checking the health of your personal finances • Today’s freakishly low mortgage rates can’t last. What will pandemic home buyers do when they rise? • There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes • Taking CPP early can cost you $100,000 and limit your long term options • Fleeing the city for the suburbs? Watch out for higher property taxes, more cars and other costs
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob Carrick