AMEX TAKES GOLD
The credit card’s rewards program was ranked the best overall in Canada,
Dick Smyth, a retired radio personality now living in cottage country, is angry at his credit card company.
“Dealing with MBNA has become a nightmare since your acquisition by TD Bank,” he wrote in a letter to the card issuer after enduring five frustrating sessions on the phone over two days.
“Just to talk to somebody by phone requires answering several security questions. If you do get someone, they ask yet more security questions. Nor is it possible to communicate with you by email.”
After speaking to an MBNA executive, Smyth feels nothing will change. But he refuses to relinquish the card, which offers travel medical insurance for those over 65 (grandfathered coverage from a previous Laurentian Bank card), which he can use for jaunts to the U.S.
As well as a desire to hang on to your perks, there are other reasons behind consumers’ reluctance to switch credit cards.
I’ve heard horror stories from people who forget the bills that are paid through their credit card accounts. This can lead to a damaged credit report or cancelled insurance policies when the monthly payments fail to arrive after a credit-card swap is made. Then there’s the difficulty of shopping around for credit cards. You need a detailed spreadsheet to compare the hundreds of offerings and assign monetary values to cash rebates, reward points and insurance benefits.
Luckily for math-challenged customers, there are many Canadian personal finance websites that prepare annual rankings of credit cards and pub- lish the results.
RewardsCanada.ca compares about 75 Canadian cards that offer points for travel. Founder Patrick Sojka named the American Express Gold Rewards Card as Canada’s best overall card in the 2016 rankings, since it lets customers use points in any way they want for virtually any travel.
GreedyRates.ca, founded by former credit card insider Marc Felgar, also rated Amex Gold Rewards as the best flexible travel credit card in his 2016 rankings.
He likes the 25,000-point bonus to new clients who charge $1,500 in purchases to the card in the first three months. The first year’s fee (normally $150) is also waived, allowing customers to try the card at no cost.
“You can book any travel-related purchase on the card and then use your points to pay any of the travel expenses that show up on your statement, including taxes and fees,” Felgar said about the card. In late June, Amex Gold Rewards won another accolade from blogger Stephen Weyman, founder of Howtosavemoney.ca.
Using a ranking system that took him five years to develop, he looked at 124 cards of all types and ranked them on 40 factors to determine the best overall credit card for Canadians.
“The total rewards system of the American Express Gold Rewards Card simply cannot be beat,” Weyman said, giving a detailed list of criteria for choos- ing the card:
You can convert the points one-forone with Air Canada’s Aeroplan or British Air’s Avios, giving you access to 42 airlines using airline alliances. Your points become about three times more valuable when converted to miles.
You get reward points equal to 1 per cent of total spending, but that doubles to 2 per cent when you buy gasoline, groceries, drugstore merchandise and travel.
You need a minimum income of $20,000 a year to qualify for the card. Most competitors require an income of $60,000-plus.
You get a travel insurance package that offers 15 days of emergency medical coverage, a free secondary card and more bonus miles when you book with American Express Travel.
But there is a major drawback. American Express is not as widely accepted as Visa and MasterCard, since the company tends to charge higher fees to merchants.
“I can use my Amex at most places I shop,” says Weyman, who lives in New Brunswick, “but there are a few big ones like Loblaws/Superstore and Costco that don’t accept it.”
His tip: Keep a no-fee credit card as a backup when Amex is not accepted. He likes the Tangerine Money-Back Credit Card, which offers 2 per cent rebates in up to three categories you choose (including furniture, home improvements, recurring bill payments, public transit and parking).
Weyman does look at card acceptance in his rankings; Amex would have performed even better if accepted as well as Visa and MasterCard, he says. However, he’s thinking of boosting the weight of the acceptance factor in future years.
Ellen’s advice Many personal-finance bloggers have affiliate relationships with credit card companies and may earn fees if you apply for a card at their site. They may also run sponsored posts or display ads.
Check their terms and conditions for details. For example, Weyman’s policy says, “I always give my honest opinion of any product or service I’m discussing, regardless if there is funding involved or not.”
To find a comparison free of commercial influence, try the credit card selector tool at the Financial Consumer Agency of Canada’s website. Ellen Roseman’s column runs every Tuesday in Smart Money. She can be reached at eroseman@thestar.ca.