Canadians switching to no annual fee credit cards to save money: survey
Canadians love to use credit cards and collect rewards for free flights, groceries or to get cashback.
A new survey by J.D.Power found that during the pandemic many have decided to ditch their annual fee credit cards in favour of cards that don’t charge a fee.
Over the past year, 22 per cent of credit card customers switched to a no-annual-fee card to save money.
“It seems there is more of a preference or a move towards no-fee cards. Not having an annual fee on your credit card is important for some consumers right now," John Cabell, J.D. Power’s director of banking and payments intelligence, told CTV News Toronto.
Many Canadians use a credit card that is issued by their bank, but the 2021 Canada Credit Card Satisfaction Study found it may also be a good idea to check around to see what other financial institutions are offering.
“Issuers are issuing new types of credit cards all the time, so there could be new products out there that you are not familiar with that might fit your needs better," Cabell said.
The survey found that Tangerine Bank, Canadian Tire and PC Financial came out as the top three cards when it came to benefits, services and rewards.
2021 Credit Card Satisfaction Survey
- Tangerine Bank
- Canadian Tire
- PC Financial
- American Express
- Desjardins
- RBC Royal Bank
- Capital One
- Scotiabank
- CIBC
- National Bank
- BMO Bank of Montreal
- MBNA
- TD Canada Trust
Before the pandemic, a popular choice for rewards was cards that allowed you to collect points towards flights and hotel stays, but with many people not travelling, 22 per cent have postponed reward redemption for more than a year.
The number of customers choosing travel rewards cards through the comparison website Ratehub.ca has dropped by about 50 per cent.
“The fact is that a lot of Canadians don't want travel points if they are not going to use them any time soon and would rather have cold hard cash in their bank account or credit card,” Mikael Castaldo with Ratehub.ca told CTV News Toronto.
Ratehub allows you to compare credit cards depending on whether you want to earn rewards or pay low interest.
Castaldo said it's best to do research to find a card that's best for the type of spending you do and make sure the rewards you're collecting aren't costing you money.
“Rewards are great when you're paying off your card and you have no balance, but if you are in a situation where you're paying interest, you're missing payments and paying annual fees that can quickly cancel out your rewards," Castaldo said.
Some users take out multiple credit cards to chase rewards, a practice known as “churning.” However, while you may collect extra points, the practice could damage your credit score.
CTVNews.ca Top Stories
Bodies recovered in Mexico likely 2 Australians, 1 American who went missing: officials
Three bodies recovered in an area of Baja California are likely to be those of the two Australians and an American who went missing last weekend during a camping and surfing trip, the state prosecutor’s office said Saturday.
Work stoppage possible as WestJet issues lockout notice to maintenance engineers' union
A lockout notice issued by WestJet to a union representing aircraft maintenance engineers could result in a work stoppage next week.
No proof man lied to brother about number of kittens born in litter, B.C. tribunal rules
A man was denied a $5,000 payout from his brother after a B.C. tribunal dismissed his claim disputing how many kittens were born in a litter.
'I just can't believe that it took so long': Body found in wreckage 3 months after deadly fire
A man accused of arson in a January Old Strathcona apartment fire is expected to be charged with manslaughter after a body was discovered in the burned building late last month.
Quebec police hand out hundreds of tickets to Hells Angels and other bikers before 'first run' meeting
Quebec provincial police handed out hundreds of fines to Hells Angels members and other supporting motorcycle clubs who met for their 'first run' in a small town near Sherbrooke, Que.
London Drugs begins 'gradual reopening' on 7th day after cyberattack
Almost a week after all London Drugs stores across Western Canada abruptly closed amid a cyberattack, they began a "gradual reopening" on Saturday.
Auston Matthews skates ahead of Game 7, status unclear with season on the line
Auston Matthews was back on the ice with his teammates Saturday.
Russia puts Ukrainian President Zelenskyy on its wanted list
Russia has put Ukrainian President Volodymyr Zelenskyy on its wanted list, Russian state media reported Saturday, citing the interior ministry’s database.
Snakes almost on a plane: U.S. TSA discovers a bag with small snakes in passenger's pants
According to an X post by the Transportation Security Administration, officers at the Miami International Airport found the small bag of snakes hidden in a passenger's trousers on April 26 at a checkpoint.