Ratehub.ca Roundup: March 2018

Jane Switzer
by Jane Switzer April 2, 2018 / No Comments

Consumer banking-related complaints hit a five-year high, another major bank has joined the ban on buying bitcoin with credit cards, and British Columbians are more scared than prepared.

Here are some personal finance headlines you may have missed last month.

Bank of Canada maintains key interest rate at 1.25%

Canada’s central bank announced March 7 it’s keeping its target overnight lending rate at 1.25%. The breather on tightening monetary policy comes amid moderating economic growth, uncertainty around global trade policies, and the bank keeping an eye on household debt and “the economy’s sensitivity to higher interest rates.” Inflation is running at its fastest pace in three years, but the bank said it will be “cautious” about future rate hikes as it assesses “the evolution of economic capacity, and the dynamics of both wage growth and inflation.” The Bank of Canada’s next interest rate announcement is scheduled for April 18.

BMO joins TD in banning customers from buying bitcoin on credit cards

Bank of Montreal has become the second of Canada’s Big Five banks to ban customers to from “buying cryptocurrencies using Mastercard-branded credit or debit cards,” reports The Canadian Press. The move comes a month after Toronto Dominion Bank banned the use of its credit cards to buy bitcoin and other cryptocurrencies as it assesses the “evolving market.” Several banks in the U.S., U.K., and Australia have also halted the use of credit cards to buy digital currencies. The price of bitcoin hit an all-time high of US$19,783 on Dec. 17, 2017 before falling to US$6,926 at the open of April 1.

Ask B.C. residents if they are covered for wildfire. 25% will tell you this…

British Columbians are worried about severe weather emergencies, but a recent poll found only a portion are insured against the hazards concerning them most. Commissioned by Emergency Management BC to assess personal preparedness throughout the province, the survey of 1,200 people found only 48% of metro Vancouver and 52% of Vancouver Island residents have earthquake insurance, while 45% of southern interior 39% of northern B.C. residents “believe they are covered for wildfires.” The main reasons for not having an emergency plan or grab-and-go kit? “Personal laziness” and “apathy,” according to the survey.

Ombudsman heard 28 per cent more bank customer complaints in 2017

Banking-related complaints to the industry’s dispute wrangler hit a five-year high in 2017, with compensation to customers who won banking-related cases reaching more than $165,000. The Globe and Mail reports that the Ombudsman for Banking Services and Investments (OBSI) saw a total of 721 cases last year related to credit cards, personal accounts, mortgages, and investing, 371 of which related to banking. Scotiabank had the highest number of complaints among the institutions OBSI oversees, with 128 cases. OBSI doesn’t oversee Toronto Dominion Bank and Royal Bank of Canada, which use the private firm ADR Chambers. In 2017, ADR opened 157 TD-related complaints and 118 for RBC.

Retailers fight for lower credit-card fees as business group strikes deal

An industry group representing small and medium-sized Canadian businesses has reached a deal to slash American Express credit card fees for member merchants by nearly 50%. The Globe and Mail reports the Canadian Federation of Independent Business (CFIB) struck an agreement with global payment company Chase Merchant Services to reduce Amex fees from between 3%-3.5% to 1.8%. CFIB has continually campaigned against high credit card processing fees businesses must pay to accept plastic, pointing out Canadian fees are higher than in Europe and Australia.

Credit card fees are a persistent sore spot for retailers. In 2016, Walmart Canada stopped accepting Visa credit cards at its stores in Thunder Bay, Ont. and Manitoba due to what it called “unacceptably high” fees. The retailer threatened to cut Visa from its 400 stores across the country, but the two companies reached an agreement in January 2017.

Teach kids financial literacy with childhood bank accounts

Just as kids crawl before they walk, a savings account can be a solid foundation for teaching lifelong money skills. Rather than bombarding kids with information once they turn 18, Bank of Montreal regional vice-president Omar Abouzaher tells The Canadian Press parents should use bank accounts to instil the basics of budgeting at an early age: “The older they grow, they’ll understand as well the other components or the other pieces that are maybe a little bit more complex when it comes to understanding debt, understanding what it takes to pay tuition, what it takes to manage your credit.”

Ratehub.ca updates

Are millennials who join startups “[treating] their careers like lottery tickets” ? Ratehub.ca co-founder and CEO Alyssa Furtado begs to differ. Writing in The Globe and Mail, Furtado argues that fortune favours the bold: “Think of working at a startup as an investment in your career, and make sure you choose the right company for your goals.”

Speaking at Best of TechTO on Feb. 27, Toronto Mayor John Tory gave a shoutout out Ratehub.ca as being among local tech companies who “represent the future of Toronto.”

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