Tuesday, 18 September 2012

Credit Cards in Canada *shudder*

In Australia I've had 4 difference credit cards, all except one I was kinda obsessed with. So overall, my credit card experience in Australia has been positive. I honestly have no idea how people in Canada keep track of their finances. So far I have failed pretty badly. Online banking here predates the dinosaurs which I think is my biggest issue. Without immediate information I'm hopeless. So Gen Y.

It took us around 3 months to get a Canadian credit card, and when we did it had to be 100% prepaid (but don't worry, we still pay interest if we don't meet our payments!!). My feelings towards my current credit card gives me rage. Elevated blood pressure, sweats, goosebumps, banging my head on the wall (literally) type of rage.

My anger reached it's maximum (I hope), after the Labour Day weekend. I went to fill up the car only to have the credit card declined. This happens often with our shitty $1500 prepaid limit so I wasn't too concerned. However, when I logged into our account it said I had $0 available limit, and I actually owed $2000? WTF, $500 over my limit. Fantastic. I obviously panicked a bit and paid the $2k cursing about how that had happened. Important note: when you pay off more than your credit card limit, with TD it still tells you your "available limit" is $1500*. The * doesn't help. So I have no idea how much is on my card until 3 business days later when it's itemised. Yay! The next day I log on again to make sure everything is ok.... low and behold my credit card went down to -$4000 over the weekend. Yep, $2500 more than our limit. I'm crazy by this stage, only to be greeted the next day with our card showing I had over paid by $1300. Joy.

Seriously it's 2012, TD you need to catch the F up! Who would have thought Australian banking would be superior. At anything.

In Canada EVERYTHING is based around your credit history... in Canada. They can't use the internet so history from anywhere else is redundant. Providers will also use this as blackmail when you have a dispute over a bill. Fantastic!

Canada, pretty sure you didn't go into full recession in 2008 because you have a resource based economy. Just like Australia. Not because you have these stupid rules. Also from what I've heard, the States is similar for credit. Everyone knows how good their economy is....

If anyone plans to move to Canada (and as much as I hate the credit scenario with a passion - I would recommend it):
  • DON'T apply for a credit card right away. Get some money in your account and wait a few months. Then do it online, not at the bank!
  • DON'T apply for more than one card if you get declined. That just damages your credit rating further (true story).
  • DO ask a bunch of different places when trying to get a car loan. We went to 4 different Toyota dealers and only one said we wouldn't have to pay in full. You'd think they'd want your money, but some people are just lazy.
  • DON'T rely on online banking to track finances (with TD anyway)
  • Pay bills on time (this seems like it's obvious, but in Australia because we have a half decent interest rate earning interest>paying bills early - I think)
Update: Our credit card has now started blocking our credit card everytime it gets to zero - like having to call customer service and be on hold for 30 minutes to get it unblocked. Then we get charged for overdrawing it. Fantastic, I think I preferred it when they just let it run up to -$4000.

Update round 2: At least we aren't in the US. My old BOSS who lives in NYC only just got a credit card after 18months.... It totally explains why their economy is going so well......

Update round 3: OHH EMMMM GEEEE O'Hara finally got an unsecured credit card! Miracle! It's through Presidents Choice (which is like a home brand of one of the supermarkets). So excited! Byyyeeeee TD!
Do you like our sweet coin table? It's awesome!


  1. I would say some of the observations are to be taken with a grain of salt.

    When i came here 15 years back, I opened a chequing account at RBC and then applied for a credit card via a paper application twice and got denied both times. Later I called the bank and said i need a credit card. The account manager asked me to wait for a 1-2 days and called back to come visit her in person. She apologetically gave $500 limit unsecured credit card. Curiously i asked her whether she can give the same privilege to my room-mate who had also recently arrived and was very glad to give him the $500 credit card as well. I still have the $500 credit card even to this day. Ha..

    I track all finances via online banking and it immediately gives me up to date information (even as recent as 1-2 hour transactions before)

    Almost every bank nowadays have packages (credit card and others) specifically designed to address newcomers unique requirements to Canada.

    1. I honestly think everyones experience is different (which is also annoying). I had a friend who had the VP of the company he works for give the branch manager a talking to and they "sorted it out". I also met someone who saved up over a month in their account then applied online and didn't provide their SIN. This also worked.

      The "packages" that they offer we found were not at all suitable for us. We originally had a immigrant account with RBC and it was hopeless. The credit card had to be pre-paid AND we had to get a letter of recommendation from our bank at home. So they could lend us our own money. Really?? Also, the "free" cheqeing account we got had minimal free transactions so we ended up paying a bunch in fees anyway. I think the Scotia account may be slightly better but there is still the little star next to the part that says "we'll give you a credit card". It means it has to be prepaid. We asked.

      I also agree that a $500 limit is suitable for some people, but when you're looking at booking two tickets to Australia and back it isn't. It would also be ok if you could tell how much additional money you've got on your card. Maybe with other banks you can, but with TD you can't unless you wait three days for the itemised transactions. Given we've been through 3 different accounts, it's not worth our while changing again.

      This post is a rant after a hugely frustrating weekend, and really months of dealing with something that's a lot easier back home! The advice I believe is still valid, and it's how I would go about finances if I got to do it all again!

  2. I am not a huge user of credit cards perse, maybe that's why the firms do not send me applications to apply for more credit. It's very surprising to hear TD would not give an itemized list of charges for 3 days. The best way i feel is call the toll-free line on the back of the credit card and voila you should get your account balance and the latest itemized list of all the charges. Alternatively you can email the PR contact on the bank's website with a CC to a popular local newspaper consumer issues contact and you may most likely see how things may change quickly.

    $500 or $1,000 unsecured credit line on a credit card is a no-brainer. I wonder why banks are so risk averse in the first place. Isn't it curious to know the same banks will trip over each other when you use the credit card heavily and you have balances to pay every month to lend you more money. They do not really like customers who do not have any balance at the end of every billing cycle as they cannot make any money you see.

    1. Oh totally! While we're not at all risky clients, we're also not good ones. We are always using our own money, so are just getting the awards benefits and the bank gets no interest or fees.

      When we got a car loan we were advised to stretch out the repayments to improve our rating. We chose to save $3k in interest and pay it off in 6 months!

      What I find so strange is the banks claims it's Visa and MC making the decisions, when we have years worth of history with them. So confusing!

  3. The banks are the card issuers and they have the ultimate say in authorizing a credit card to a customer(not Visa or MC). Visa and MC are payment platform providers and they get a cut of every transaction a customer uses it for.
    Since Visa and MC do not share the customers info to any card issuer as far as my knowledge, it is difficult for a card issuer in one country to access the history of the customer from another country.

  4. Just found your blog - I feel your pain! We moved to Alberta from England in June and it took aaaaages to get a credit card and it's a secured one too! And to get a mobile phone contract my other half had to put down a big deposit (I got a $200 spend limit). However, we got lease financing from Honda and a mortgage with no problem at all. And when the mortgage financing was done our adviser said we could get an unsecured card from them (different bank to where we got the credit card from - we were soooo frustrated with the first bank there was no way we were getting our mortgage with them). I also agree with what you say about the online banking - it seems antiquated as does bill paying!

    1. Haha I think it's the biggest pain for so many expats in Canada and the US. There's nothing more frustrating that being treated like you're worse than bankrupt. I think Canada is especially painful because Visa Debit isn't a big thing here yet. So no credit card means no booking anything online, no holidays, no hotels etc.

      I just applied for another credit card, because we spend so much money on it we need to get something that has half decent rewards. At the moment we only get about 0.95% back and only on the first $25k. Useless!!

  5. I find this interesting --- I'm curious what it would be like to be a foreigner in Aus. As frustrating as it is, CDN banks rely on your credit history and when you don't have any history in Canada, they're not going to be doling out money and visas with high(er) limits. To be honest, I hear it's the same in Norway (where we are currently living.) I got my first CDN Visa when I was 18 and it was at a $500 limit which was steadily increased, without my asking, as my history showed that I paid my bill. (Even now, over 10 years later, it's only at $5000 which would be difficult to book return trips to Aus on.) Both my husband and I keep our CDN Visas and continue to use them while living abroad because we just couldn't rely on being accepted in foreign countries - especially because we're only in the country for 2-3 years.

    I've never dealt with TD but it sounds to me like they're rubbish. My husband and I do all of our banking online (obviously because we don't live in Canada) with RBC and Credit Union and have never had any issues. {And a minor technicality, we didn't hit the recession like the US for a variety of reasons but certainly strict credit rules played a part - many Americans were able to borrow above their means, buying houses with little to no down payment and being able to mortgage over 50 years.}

    In any case, I hope you get a proper visa soon - my husband and I were talking about this recently. Many Norwegians don't own a credit card at all and we wonder how they plan any sort of travel - I suppose you'll be an expert at it in the end!

    1. Is Visa Debit big in Norway? I think that's slowly getting bigger here... which would make booking travel a lot easier!

      I worked at an engineering firm in Aus that hired a lot of expats from the US on exchange. They were on the 457 visa (so similar to our work permit) and had no problem getting a credit card. They actually thought it was laughable how easy it was! I couldn't say what consumer debt in Aus is like in comparison to Canada but I think it would be interesting... there are always stories in the news about how high it is in both countries :)

      Interesting, there has been a lot of press both here and Australia about a housing crash similar to the US. I hope not though, I'd like to think all the back patting Aus and Canada have been doing wasn't for nothing ;) Also, banks have no issue giving us a mortgage!

      Thanks for you comment! I'm the same, LOVE expat blogs from Australia. It's like other people having trouble in my country makes it seem so much easier for us.