Canadians Switch to No Annual Fee Credit Cards to Save Money: Survey


TORONTO – Canadians love to use credit cards and earn rewards for free flights, rides, or cash back rewards.

A new investigation by JDPower has found that during the pandemic, many decided to ditch their annual fee credit cards in favor of cards that don’t charge a fee.

In the past year, 22% 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-charge cards. Not having an annual charge on your credit card is important to some consumers right now, ”John Cabell, director of banking and payment information at JD Power, told CTV News Toronto.

Many Canadians use a credit card issued by their bank, but the 2021 Canada Credit Card Satisfaction Study found that it may also be a good idea to check what other financial institutions are offering.

“Issuers are constantly issuing new types of credit cards, so there might be new products you don’t know about that might better meet your needs,” Cabell said.

The survey found that Tangerine Bank, Canadian Tire and PC Financial ranked among the top three cards for perks, services and rewards.

2021 Credit Card Satisfaction Survey

  1. Mandarin Bank

  2. Canadian tire

  3. PC Financial

  4. American Express

  5. Gardens

  6. RBC Royal Bank

  7. A capital letter

  8. Scotiabank

  9. CIBC

  10. National Bank

  11. BMO Bank of Montreal

  12. MBNA

  13. TD Canada Trust

Before the pandemic, a popular choice for rewards were cards that allowed you to collect points for flights and hotel stays, but with many people not traveling, 22% postponed redeeming rewards from more than a year.

The number of customers choosing travel rewards cards on the comparison website has dropped by about 50%.

“The point is, a lot of Canadians don’t want travel points if they’re not going to use them anytime soon and would rather have hard cash in their bank account or credit card,” said Mikael Castaldo of Ratehub. .ca to CTV. Toronto News.

Ratehub lets you compare credit cards based on whether you want to earn rewards or pay low interest.

Castaldo said it’s best to do your research to find a card that best suits the type of spending you make and make sure the rewards you collect don’t cost you money.

“The rewards are great when you pay off your card and have no balance, but if you are in a situation where you pay interest, miss payments, and pay an annual fee that can quickly void your rewards,” says Castaldo.

Some users take out multiple credit cards for rewards, a practice known as “churning”. However, even though you may collect additional points, this practice could damage your credit score.

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