Video Time: 08:10
In this video I’m going to explain what makes credit cards rock, the different types of credit cards and their point systems, how to choose the right card, how to cancel cards and the best cards to get started with right now.
Credit cards are a great option for those who want to maximize their point-earning possiblities. You’ll notice that I only recommend credit cards that have a really good bonus offer. I also try to find credit cards that waive the first year fee unless the amount of bonus points is worth the cost. You don’t have to worry about finding these credit cards because I will send them to you via deal-alert emails if you’re subscribe or you can download the PDF below. If you pair this up with some other strategies, you can easily find yourself with 50,000-100,000 points every year. The best credit cards in Canada at the moment are often with American Express and I have shared exactly which ones (in the PDF) and why below.
Do some research on all the credit cards I recommend and start with the one that looks best for you. I love American Express (Well, I just love their points) but if it doesn’t transfer to the particular airline(s) your interested in, then it might be best to go with a different card. However, keep in mind that even if your airline isn’t a part of Amex, it may still be possible to use the points with them. For example, United Airlines is not a part of Amex but Air Canada is. Both Air Canada and United are a part of the Star Alliance network which means you can book United through Air Canada. (before transferring points to a carrier, phone them first to make sure they have availability.)
Personally, I apply for every credit card that has a big bonus of travel points. Once I have the bonus points, I decide whether the card will be useful to me. If not, I usually cancel the card, although I try to wait at least four-six months just because. If I really like it, I may hold on to it. Other times, I might even apply for the same card year after year. My credit score has actually gone up since I became a travel hacker. My goal is maximum points for minimal effort.
Since credit cards are a very simple and lucrative method for earning travel points, I encourage you to charge as much as you can to the card. I even use my card to buy a pack of gum. However, this is only if you’re responsible with the card, use it for purchases you really need and pay it off in full each month. If you’re paying interest, it defeats the value of the points. As long as you’re going to be buying the items anyways (like groceries and gas), you might as well use the card and earn the points.
A lot of purchases allow you to double dip with points. For example, when you’re shopping at Rexall, you can use your credit card (which will net you points for each dollar spent) and you can use your Aeroplan card for 1 point per dollar as well. Basically, any store that accepts Aeroplan (or another rewards program) is a great place for double dipping. Use your rewards card and your credit card for maximum point-earning potential.
American Express is a great card because they tend to offer the best point bonuses and the best chances to have a yearly fee waived. When I first started using American Express, many Canadian businesses still didn’t accept it. However, I have noticed this changing quickly. Either way, you’ll easily be able to spend the amount needed to earn the bonus points.
Amex Membership Reward Points can be used for anything in their extensive catalogue. You usually earn one point for each dollar spent and usually a big bonus after spending a certain amount within three months of receiving a new card.
The best use for Amex points is by transferring them to an airline such as Air Canada, British Airways, Delta SkyMiles or a hotel program. If you’re holding on to the card, it’s best to keep them with Amex until you know which airline you will use. This way, you can transfer them to the airline most suitable for your travel plans and you might be able to wait for a transfer bonus (throughout the year, American Express offers bonuses for transferring points. For example, you might get a 30% bonus for transferring points to Aeroplan). If you’re cancelling the card, make sure you transfer the points first to avoid losing them!
PRO TIP: you don’t need a business to apply for a small business credit card with Amex. I simply used “my name, Inc.” (replacing “my name” with your own name) as the business and it worked. They don’t seem to mind as long as you pay your bills every month.
For a list of the best Canadian credit cards I recommend as of late 2016 and early 2017, just follow the link to the Best Canadian Travel Credit Cards page. This is not a download.