Do I have to change my credit card to benefit from a welcome bonus? Yes, but it is planned.
Personal finance specialists repeat it: keep your oldest credit card to protect your creditworthiness and avoid multiplying the number of credit cards in your wallet. This is how you protect your creditworthiness.
• Also read: Is Tim Horton’s new credit card a good deal?
• Also read: Credit card: increased minimum payment
These claims need to be qualified somewhat. Credit cards are like insurance: you need to get the right card that suits your current needs. “You have to reevaluate your credit cards every two years,” says Jean Maximilien Voisine, founding president of Milesopedia. A college student will not have the same needs as someone who has just started a family, is working in their first job, or is about to retire. »
Frequent travelers won’t apply for the same rewards programs as people who eat out regularly or new parents who are more grocery or clothing savvy. And now everyone is suffering from inflation.
play the system
If you have the discipline to bring all your cards to zero balance each month, it is beneficial to switch or add a card to take advantage of the welcome bonus.
“Banks want to differentiate themselves from the competition and often offer very generous bonuses,” continues Mr. Voisine. If you just keep your card, you leave money on the table that your current bank doesn’t offer. »
You will therefore have to spend thousands of dollars to get the points that the new card offers thanks to the welcome bonus.
In a way, you play the system in your favor when you switch cards.
I browsed around the Milesopedia comparison site to discover some offers for very generous welcome bonuses (see table). Also, I found out that each credit card has its own rules for withdrawing points related to the welcome bonus (signup bonus). If the card is linked to a specific program, the points are usually deposited directly into the account of that program and not that of the card.
Some make one or more payments, often upon joining, after the initial purchase, or according to a required minimum purchase amount, or with each billing. Some will pay up to more than ten installments.
Advice
• Changing credit cards after a few years will not affect your credit report.
• Experts recommend keeping two or three credit cards in your wallet: your oldest card (for your long-term credit history), a second for everyday expenses (groceries, gas, transportation, housekeeping, children), and a third for pampering yourself (clothes , travel, electronics). You benefit from several bonus programs.
• Make sure you make at least one card transaction every quarter, even if it’s a small amount, or your credit score will be affected.
• If your oldest card no longer meets your needs, you can request a card change from your issuer without losing your credit history.
• You can have a card from a bank other than your own.
• Annual fee credit cards offer the most generous rewards.
Here are the six credit cards
Cobalt American Express
• Up to 30,000 Privilege points in the first year
• Value, Year 1: $1309
• 5% groceries and restaurants
• 2% petrol and travel expenses
Mastercard BMO Cash Back World Elite
• Up to $260 cash back
• Value, Year 1: $920
• 5% food
• 3% gasoline
• Accepted from Cosco
Scotia Momentum Visa Infinite
• Up to $200 cash back
• Value, Year 1: $848
• 4% food
• 2% gasoline
• Offer ends October 31st
CIBC Dividend Visa Infinite
• Up to $200 cash back
• Value, Year 1: $831
• 4% food, petrol
• 2% restaurants
TD Cash Back Visa Infinite
• Up to $290 cash back
• Value, Year 1: $829
• 3% gasoline, groceries
• Offer ends September 5th
Mastercard World Elite Rewards MBNA Quebec
• Up to 20,000 points within 90 days
• Value, Year 1: $733
• 5% groceries and restaurants
• Accepted at Costco