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
Orca calf that was trapped in B.C. lagoon for weeks swims free
An orca whale calf that has been stranded in a B.C. lagoon for weeks after her pregnant mother died swam out on her own early Friday morning.
King Charles' cancer treatment progressing well, says Buckingham Palace
King Charles III’s doctors are 'sufficiently pleased' with his cancer treatment and he is expected to return to public-facing duties, Buckingham Palace announced on Friday.
AFN chief says Air Canada offered a 15% discount after her headdress was mishandled
After the Assembly of First Nations' national chief complained to Air Canada about how staffers treated her and her ceremonial headdress on a flight this week, she says the airline responded by offering a 15 per cent discount on her next flight.
Sophie Gregoire Trudeau on navigating post-political life, co-parenting and freedom
Sophie Gregoire Trudeau says there is 'still so much love' between her and Prime Minister Justin Trudeau, as they navigate their post-separation relationship co-parenting their three children.
DEVELOPING Bird flu outbreaks: WHO weighs in on public health risk
The current overall public health risk posed by the H5N1 bird flu virus is low, the World Health Organization said on Friday, but urged countries to stay alert for cases of animal-to-human transmission.
76ers All-Star centre Joel Embiid says he has Bell's palsy
Philadelphia 76ers All-Star centre Joel Embiid has been diagnosed with Bell’s palsy, a form of facial paralysis he says has affected him since before the play-in tournament.
Island near Mull of Kintyre for sale for US$3.1 million
An idyllic 453-acre private island is up for sale off the west coast of Scotland and it comes with sandy beaches, puffins galore, seven houses, a pub, a helipad and a flock of black-faced sheep.
Regina police officer injured after being accidentally shot by fellow officer's gun
An investigation is underway after a Regina police officer was accidentally shot by a fellow officer’s gun during the search of a house early Friday morning.
Taylor Swift dons Montreal designer's dress in 'Fortnight' video
A pair of Montreal designers' work has now been viewed over 41 million times. Taylor Swift dons a Victorian throwback black gown in her latest music video, 'Fortnight', designed by UNTTLD due Simon Belanger and Jose Manuel Saint-Jacques.