This month’s personal finance news is sure to evoke some emotionally-charged opinions: changes to a top credit card, airlines overbooking flights, and proposed measures to help cool one of Canada’s hottest housing markets. Here’s what went down in April:
As RateHub notified readers in March, the Tangerine Money-Back Credit Card changed a few of its features as of April 29. The no-fee card was praised for its cash back rates and low foreign exchange fee when it was introduced last year, and some people aren’t too happy about the changes — the phrase “bait and switch” has been bandied about. However, as Globe and Mail personal finance columnist Rob Carrick points out, sweet new deals are always temporary. Lesson #2: a bank is a bank — their mission is increasing profits. If you’ve had the same card for a long time and find it isn’t creating value, compare the best credit cards to find one that best fits your spending habits and needs.
This month in housing market madness: On April 20, the Ontario government announced 16 measures aimed at quelling Toronto’s insane rental and housing markets. They include expanded rent control to include buildings built after 1991, a 15% non-resident speculation tax on homes in the Golden Horseshoe, and identifying surplus lands that can be used for affordable housing development.
It’s welcome news for a city where the average price of a home was $916,567 in March, according to the Canadian Real Estate Association, but experts say the measures may not have long-term consequences. CIBC deputy chief economist Benjamin Tal told the Canadian Press that, like Vancouver, the market will cool as buyers wait to see how the new measures play out, but will bounce back as demand returns. Via BNN, you can read all 16 measures here.
After video of a passenger being forcibly removed from a United Airlines flight on April 9 went viral, you’ve probably noticed Canadians coming out of the woodwork to share their own stories, such as missing a $10,000 Galapagos cruise or a 10-year-old boy bumped from a March break flight.
One Ontario couple told the CBC they were bumped from a Miami-bound Air Canada flight and ended up losing almost a whole day of vacation after waiting 12 hours for the next available flight. They estimate the delay cost them about US$500 total: $300 for a night in a Miami airport hotel (they arrived in the middle of the night), and $200 for a non-refundable night they missed at a hotel in their actual destination, the Florida Keys.
Air Canada compensated the couple $30 in meal vouchers and $800 each (plus another US$300 for their Miami hotel after CBC contacted the airline for comment), but they experienced the frustration at the core of stories like this: overbooking is a common practice across the airline industry that renders customers powerless and often confused about their rights, and no dollar amount can make up for lost time.
As the CBC notes, unlike the U.S. and Europe, Canadian airlines set their own compensation guidelines “for things like delays, overbooking, and lost baggage.” However, if you’ve booked at least part of your trip using one of the best travel rewards credit cards, you’re covered by a suite of insurance benefits that include the annoyances mentioned above, as well as medical and accident coverage (RateHub offers printable, pocket-sized insurance guides for each plan, btw).
The Bank of Canada announced April 12 it’s keeping its key overnight interest rate at 0.5%. The reason? “It is too early to conclude that the economy is on a sustainable growth path,” the central bank said in a release.
Despite a slew of recent positive data, several caveats weigh on Canada’s economy: hours worked and wage growth were soft, business investment is weak, and exports face “ongoing competitive challenges,” particularly as tensions simmer with the U.S. over trade policies. The U.S. Federal Reserve hiked its key interest rate to a range of 0.75% to 1% on March 15, but the Bank of Canada made it clear our economy still has a lot of “slack” compared to our neighbours.
The bank’s next interest rate announcement is scheduled for May 24, but it’s widely expected it won’t hike its trendsetting rate until 2018.
Good news, dollar store denizens: Dollarama will start accepting Visa, MasterCard, and American Express credit cards at its stores across Canada this summer. With better-than-expected results for its latest quarter, the Canadian Press reports the chain expects to open 60 to 70 new stores across the country in 2017-18. Shoppers have previously only been able to pay by cash or debit card, which typically has lower processing fees for merchants than credit card transactions.
Credit card processing fees were previously a sore spot for Walmart Canada, which announced in July 2016 it would stop accepting Visa credit cards at stores across the country due to “unacceptably high” fees. The retailer relented in January after reaching an agreement with Visa.
On May 11, RateHub CEO and co-founder Alyssa Furtado will deliver the keynote speech on successfully scaling a company on day two of the Breakout Project, a three-day event in Kingston, Ont. for startups and entrepreneurs to learn about kickstarting social good projects. Chris Richard, RateHub’s chief technical officer who leads the web development and operations team at the company’s Kingston office, is also slated to share his technical prowess.