Monday, March 31, 2008

Should I Get a New Credit Card?

I recently came across a post on cash back credit cards over at MillionDollarJourney. He also has a follow up here. RedFlagDeals also has a good comparison of rewards cards which is worth a look.

It got me to thinking that maybe i should get a new credit card and ditch the old one. I currently have a Scotia Value Visa with a fairly low interest rate of 11.4%. However, i pay an annual fee of $29 for this low interest rate. This was fine when i was carrying $5000 balances month after month as the annual fee easily paid for itself with the savings on interest. Now though, i have no credit card debt and pay off any balance every month.

So my rationale is to get rid of the Scotia card as i am now wasting $29 a year for something that is not providing any benefit. I would then get one of the cash back cards that pay cold hard cash in exchange for using it. I like the idea of getting actual cash back in my pocket, and then i can choose how to spend it. I realize that some of the other rewards cards pay a slightly higher percentage payout, but those rewards don't appeal to me as much as cash.

There is one little hiccup. Actually two. I do not own my own place and am looking to do so in the near future. So i am hesitant to get a new credit card which would affect my credit score some. This could in turn affect the interest rate i would have to pay on a mortgage. I know i have a good credit score but don't want to mess with it until after having bought a place.

The second hiccup is that i would be a little worried i would actually spend more on my cash back credit card than normal just for the benefit of the extra cash i would get back. This actually happened once before when i had a GM Visa with a certain percentage going toward a new vehicle. I paid for everything with my GM Visa and did not pay attention to how much money was flowing out of my pocket. So if i were to get a new cash back card i would have to be very careful and extremely vigilant about not spending more than what i need to.

The Bottom Line

For now i think i will hold off on the new credit card until i have obtained a mortgage. Once i have the mortgage (and lots more debt to boot) then i will get the new credit card and cancel the current one. Food for thought.

Dividend Dollar Daily Round Up

The Round Up

I've heard the term "equalization payments" used before, but never really understood what they were until i read this article about Ontario becoming a have not province.

Dividends4Life makes and interesting comment about the number of Canadian dividend blogs.

Report On Business always has a weekly article giving a financial facelift to people.

No Fee Bank Account

So i recently decided to open a no fee banking account. We all know that banks charge fees for everything and this contributes to their always rising profits (US housing crisis not withstanding). There are probably a lot of people who will clip coupons to save a few cents on an item, yet they don't pay any attention or have no idea what they pay in bank fees every month. It would not be uncommon to pay $5, $10 or even more a month for using your bank account. This may not seem like a large amount, but over the course of a year this can add up.

I sat down and figured out that over the course of 19 months i paid $99.45 in fees. That is over $5/mth on average. I don't write many cheques and hardly ever use an ATM card though. For those that make a lot of ATM transactions or pay for unlimited transactions, that could really add up.

If you are interested in a no fee account you can find out about it here. I would highly recommend doing this in person as it only takes about 10 minutes. I did it online and it was a real mess.

I will take my $5+/mth and invest it or use it for something i enjoy. Let's face it, $5/mth in banking fees do not enhance my life in any way.

Dividend Dollar Daily Round Up

The Round Up

The Globe Investor magazine has a good article why bonds are a bad deal.

Here are the Top 10 Features Of A Profitable Rental Property by Andrew Beattie at Investopedia.

Sunday, March 30, 2008

About Me

I’m a 31yr old from Ontario, Canada who has an interest in dividend growth investing and many other matters of personal finance and investing. I have always had an interest in money ever since childhood (what kid isn’t interested in money). Two years ago I picked up my first financial book (Start Late, Finish Rich by David Bach) and it changed my outlook on retirement and my financial future. It was basically a wakeup call telling me to “get going”.

My strategy is to invest in companies that constantly grow their dividend year after year to provide me with a steady stream of income for retirement.


This is an informational site only. I am not a professional financial planner, nor do I pretend to be. Dividend Dollar is not responsible for any loss from the use of this site. Always do your own research and homework before making an financial decision.

Saturday, March 29, 2008

My First Post

Hey folks! This is the first of what will hopefully be many posts on everything dividends and other personal finance matters. This is my first blog on blogger, so i expect a bit of a learning curve for the first little while. Therefore the posts may be a little slow at first, but hopefully become quite regular after some time.