Green Tip # 23: Use One Great Rewards Credit Card

MBNA smartcash platnium mastercardI recently wrote about My Journey to the Best Canadian Rewards Credit Card.  This is the only credit card I carry.  Having a single credit card meets my needs in that I feel the rewards on this card (The MBNA Platinum Smart Cash MasterCard® Credit Card) are some of the best available for people who like this credit card benefits paying them instead of paying interest.  Since we only use the one credit card we see little point carrying tons of cards (Mrs. SPF carries a VISA too) and having these companies send us needless paperwork, even though we request paperless billing whenever it is offered.  The added plus is that my wallet isn’t bursting at the seams!

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9 comments to Green Tip # 23: Use One Great Rewards Credit Card

  • I’m going to have to disagree with you here. Of course having only one credit card is ideal, but when the rewards stack up in such a way that it makes sense to have 2 or more, then I will definitely do that.

    I’ve also been in situations on several occasions where a card was declined for security reasons and when I have been on vacation in foreign countries. It can be hard to get that cleared up quickly sometimes, so having a backup is always a good idea in my opinion.

    I carry 3 right now: SPG Amex (primary), Smart Cash (gas and groceries), and MBNA Travel Rewards Elite (where Amex isn’t accepted).

    • Mrs. SPF carries a Visa which is very dusty. We’ve never run into a situation where we needed it. The MC works every time … and we don’t use our CC’s in foreign countries due to the lethal exchange rates extortion. I’ll look @ the SPG Amex a little closer, and the Capital One Aspire Air Miles one. But for now, we love raking in the bucks from MBNA (just found a cheque yesterday I forgot to cash, so we’re up to $400 from MBNA this year!)

      • Just a comment on CC exchange rates. I don’t really think the 2.5% that most credit cards charge for doing an exchange to be extortion. I believe they give you the actual spot or daily exchange rate without any markup and then add 2.5% to that as their cut.

        If you walk into a bank, the posted exchange rates there already include a large markup sometimes as much as 3% or more. As far as I know, you typically pay more at a bank for converting small sums of money. If you factor in the 1%-13% rewards you are getting back on your credit card into the equation, the cost of the currency exchange is lessened even further.

        You can definitely do better than 2.5% if you do the conversion with large sums through a bank, use an investment account, or use a currency exchange company that has good rates but most people aren’t going to go to those lengths.

        I’d be interested to know how exactly you convert your money into foreign currency. I plan to write about the subject someday and have already done some research into the matter.

        • For sums over $10,000 I use knightsbridge for sums under $10,000 I use xetrade. Once the accounts are set up the process is simple enough and I much prefer to pay 1% or less on f/x. Our Subaru purchase would have meant paying $1500 more if we’d used a bank at posted rates (which is what they told me I would get, to which they were laughed at).

  • Finanzas Personales

    I kind of agree with both of you. I once had 5 credit cards, but decided to choose the “best 2” and cancelled the other 3. Now, I feel I have better control of what happens with my expenses and have the relief of a backup whenever one of them is declined or the store doesn’t accept brand X or Y.

  • Right, makes sense. Most people just do small conversions when they go cross border shopping though.

    Don’t you need an USD bank account to use xetrade? I don’t think most people have one of those nor would they set one up just to exchange a few hundred dollars.

    Most Canadians aren’t buying brand new cars in the USA, although I might for my next car :)

    • You’d be surprised how many people are importing. Google it – the numbers increase each and every year as Canadians learn we’re being ripped off here.
      Yes, you need a USD account, which I opened free of cost and no service fees @ CIBC. No biggie really to open an acct.
      Those who are frugal will take advantage of F/X optimization, plain and simple. Those who don’t value their money will use a bank. It isn’t much different than what you write about – saving your money!

      • Oh, absolutely! It is the very same thing :) I don’t expect 75% of the people who even read what I write to do the things I suggest though. Then there’s vast majority of people who wouldn’t bother to read what you and I write at all … haha.

        I guess I was trying to approach this from the view of a “normal person”. In that light, credit cards are a better option than banks for sure.

        Doing it your way is obviously the best way, but convincing people to do it that way I think is extremely difficult. I would be interested to know the percentage of the Canadian population that has a USD bank account.

        That’s why we’re out here fighting the good fight though to change the way people do things and help themselves :)

  • I have one card and one card only. And tyring really hard to get rid of it! :-)

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