According to the Canadian Bankers Association, Canadians collectively held 74.5 million Visa and MasterCard credit cards in 2011. Given that there are fewer than 27 million Canadians over the age of 20, that works out to nearly three per adult. And that’s just Visa and MasterCard cards. With millions of retail cards issued by stores like the Hudson’s Bay Company and The Brick and it’s no wonder our wallets are bulging, even if there’s no cash in them.

But how does this compare to others countries? And what are the implications of our addiction to credit?

Credit Card Usage in The U.S. of A.

It should come as no surprise that the citizens of the world’s largest debtor nation hold the highest number of credit cards per capita: one report calculated that there were 576 million credit cards in circulation in the country in 2010. Another tally estimated that the average American carries around six credit cards. At its peak in 2008, the collective U.S. credit card debt was just shy of $1 TRILLION dollars, at $957 billion. Today, the figure has dropped to just under a mere $800 billion. You don’t want to even imagine what the interest payment on that would be at 19 percent…

Credit Card Usage in Jolly Olde England

They’re similarly fond of using credit on the other side of the pond. With some 60 million cards in circulation (about one for every man, woman, and child), in a typical month U.K. residents make about 160 million credit cards purchases, at an average of £66 per swipe. Collectively, that helps add up to a tidy chunk of the country’s collective $1-trillion pound debt (a figure that includes government, corporate, and all other debts owed).

Credit Card Usage in The Land Down Under – Australia

Way round the other side of the world, the Australian credit card addiction is less severe, but still problematic for some residents. With about 14 million cards in circulation – about one per adult, in a country with a total population approaching 23 million – cumulative credit card debt is about $50 billion, a little more than $3,000 per cardholder.

Credit Cards Rights and Wrongs

So, regardless of where you live, what do all these mind-boggling numbers mean? Well, it depends on how you personally handle your own credit cards and the credit card debt you rack up.

There’s nothing inherently wrong with credit cards. In fact, used properly, they are a key tool in a savvy consumer’s tool-belt. If you pay your bill on time every month, you effectively get a no-interest loan on everything you purchased in the weeks leading up to the due date. And, in addition to rewards programs, many cards also include built-in perks like free travel insurance. Plus, they save you having to cart around hundreds or thousands of dollars in cash every time you need to make a big purchase, all the while growing your personal credit rating month by month.

The problems start when you don’t pay your bill in full each and every month. Whether you’ve signed up for a low-interest card, one that offers a standard 15-20 percent rate, or hold something that leans more towards highway robbery (the Canadian government doesn’t consider it loan sharking until rates exceed 60 percent annual interest), the interest fees are backdated to the date of purchase, even if you’ve paid off most of the bill. One penny short of what you owe earns you a full-sized interest penalty. Start falling behind on consecutive months and your debt can quickly spiral out of control.

If you do find yourself regularly missing payments and collecting hefty late-payment fees and other penalties, you might want to consider speaking with a credit councilor to see if they can help get you back on the path to financial stability.  Credit card debt denial is not a path you want to travel down.

When I’m at the checkout, I often open my wallet and pause for a moment, pondering how to pay. Cash? Nope, too hard to get that stuff, I’m saving it unless I’m buying a pack of gum.

So it’s often the debate between debit and credit card. The final tally, in many ways, is the same. I buy something, I have to pay for it, either now (debit) or later (credit).

But the decision is much more complex if you look at the bigger picture.

When Debit is Best

A debit card is the best way to pay for the majority of your purchases if you struggle with debt. If you’re one of these people, you should flat-out leave your credit card at home in a safe place and go debit. Or,  if money is a major issue, withdraw a set amount each month and pay for everything with cash to truly keep yourself in line.

Even if debt is not a serious monkey on your back, using your debit card for most of your purchases keeps you in a clean financial situation. You can check your bank accounts regularly online to be sure you don’t go into overdraft. When your account gets low, you stop spending and turn down that offer for a nice dinner out or resist hitting your favourite store until after the next payday.

Credit Card Perks

However, the modern world of credit cards has serious appeal. Now on the market are a slew of cards that allow you to build up points for travel, groceries, gas and more.

Cash-back cards are probably the most directly beneficial to those who want to leverage their credit card use for benefits. Almost all the major Canadian banks offer cash back Visas or MasterCards, many with no annual fee. The MBNA Smart Cash Credit Card offers up to 5% cash back on gas and groceries for the first 10 months, and then a very competitive 3% after that (all other purchases will get you 1% cash back). The Scotia Momentum Visa Infinite is another great cash back card, offering 4% cash back on gas and groceries, 2% cash back on recurring payments and drug store purchases, plus 1% on everything else.

As with all credit cards, read the fine print. Make sure redeeming your cash points is easy, and that some of the great offers (low interest, a higher percentage cash back) don’t expire after just a few months. And since most cards offer big points or cash for your first purchase, activate the thing at a good time, such as when you’re paying for a vacation or a big electronics buy.

Better Security

For me, since I have no rewards on my card, a credit card is ideally suited for those big purchases when I want a team at my back.

Many cards offer some insurance for your purchases (read the fine print of course). But even if your card does not, if you do buy say a large TV and it never works and the retailer gives you a hard time, you can go through your credit card company to get your money back. Remember, these retailers have accounts with your credit card company too, and they can be refused money or lose the account.

But cards with more features offer specific kinds of insurance for travel, purchases and more. Keep this in mind whenever you buy and don’t be afraid to call on your credit card company when things go wrong.

Another huge benefit is if you are the victim of a financial crime, you’re better off having that crime take place with your credit card. Card companies are amazing at not making you pay when there are iffy purchases from a card that’s physically stolen or your info is stolen.

Build Your Credit Rating

The best way to build your credit score, bar none, is to regularly use a credit card and pay it off every month. If you’re coming out of a bad credit situation, or you just don’t have any credit history, a credit card is where you want to put more purchases.

If you struggle to get approved for a card, you can build credit by applying for a store credit card or a secured credit card. Store credit cards can be easier to get and while they charge large interest rates, having such a card will allow you to build up your rating and eventually get accepted for a more traditional card (if you pay it off on time!).

As well, banks and credit card companies offer so-called secured credit cards. They allow you to put money down (say $500) and borrow off that deposit. Clearly, these aren’t as great to have as a regular card, but this type of card is a more popular and prudent way of building your credit worthiness.  They also allow you to do things like buy online or purchase airline tickets; two things that are somewhat impossible without a credit card. Check out products like the No-Fee Scotiabank Value Visa Card or the Capital One Low Rate Guaranteed Secured MasterCard.

The Debt Card versus Credit Card Debate is a Personal One

Wherever you go, it makes sense to have both your debit and credit cards on hand. But what you choose to use should be more about the reality of your money situation than the rewards behind the card.

Like most credit card users, I chose the cards I use based on both interest rate and rewards. I have three credit cards in total. One collects WestJet points, which I use to visit my family out west. The second collects rewards points that can be redeemed for grocery money or returned as cash. The last card just collects rewards points. I couldn’t tell you what kinds of rewards I can purchase, because the whole system is so confusing that I’ve given up using the card altogether.

I’d rather use one of the other two cards simply because they’re easy to calculate and are not limited to one type of reward. While I can redeem my points for something tangible (i.e. groceries), I can also choose the cash back option and use the money to pay off other debts. If my third credit card weren’t so darned confusing, I might use it more often, but that’s not the case. Besides, I don’t need another gift card or useless electronic device. If I want those things, I’ll just buy them.

Why More Users Are Choosing Cash Back Cards

According to Globe and Mail personal finance columnist Rob Carrick, I’m not alone. Credit card users are confused about rewards points and are therefore opting for more straightforward cards. In fact, more credit card users are choosing cards that offer cash back over rewards points. Whereas travel points are still the most attractive option, cash back cards are gaining momentum.

Mary-Anne Heustis, a principal with the research firm MarketSense Inc., confirms this. “Travel is still at the top of the list,” she says, “but what we’ve seen over the past couple of years is that cash back is really picking up momentum.” Heustis attributes this change to unnecessary confusion in the credit card industry.

“It’s partly because people are getting a little tired of the complexity of the travel category,” she says. “And, there are some very rich offers on the market right now.” By “rich offers,” she’s referring to cash-back credit cards.

Another reason cash-back cards are a more desirable option is because of their straightforwardness. People are getting tired of rule changes and lame options, says Carrick. I can vouch for the lame options part. When I went to finally went to use my WestJet points, I couldn’t book the flight online, which meant that I lost out on the sale price (it was only available to those who booked online). All of these little rules are annoying and keep me from using my card to its full extent.

RateSupermarket.ca Offers a Solution

All reward cards aren’t created equal. Depending on the card you choose, you’ll be offered rewards points, miles, or cash-back. But how do you know what you’re really getting? Which card offers the best deal? To help you determine the card that offers the highest rate of return, RateSupermarket.ca has come up with an interesting and unique solution to this problem – Your Reward Return.

By putting a number of typical reward items into one basket – electronics, gift cards, etc. – RateSupermarket.ca experts have developed a metric for putting all cards on a level playing field. When comparing their list of rewards credit cards currently on the market, be sure to check their Reward Return rating. It will help you compare apples with apples and make a better choice based on the return on your spend.

Two cards of note

Based on the Reward Return rating system, here are the top two cards currently on the market.

MBNA Smart Cash Credit Card

• Interest rate: 19.99%
• Balance transfer: 1.99% (for the first 10 months, 19.99% after)
• Annual fee: $0.00
• Cash advance: 19.99%
• Min. credit score: Good
• Reward Return: up to 5.00%

Special Offer: 5% cash back on gas and groceries for the first 6 months, receive 3% cash back afterwards and 1% cash back on all other purchases. The best part about this cash back offer is the redemption process – you’ll receive a cheque in the mail automatically once your cash back totals at least $50 per month. Plus, an introductory balance transfer rate of 1.99% for the first 10 months can help reduce your monthly interest payments on your outstanding credit card debt.  

Scotiabank’s Scotia Momentum VISA Infinite

• Interest rate: 19.99%
• Balance transfer: 1.99% (for the first 6 months and the 21.99% after that)
• Annual fee: $99
• Cash advance: 1.99% (for the first 6 months and the 21.99% after that)
• Min. credit score: Excellent
• Reward Return: up to 4.00%

Rewards on every purchase: 4% cash back on all eligible gas and grocery purchases, 2% cash back on recurring payments and drug store purchases, and 1% cash back on all other purchases. Plus, you’ll get VISA Infinite enhancements – a unique program of premium enhancements including VISA Infinite Complimentary Concierge and a dedicated VISA Infinite website to help you easily track your cash back rewards.

You’ve seen the credit card offers before: 0% interest on balance transfers, or transfer your outstanding credit card balance and get this great (insert gift incentive here).  So what’s the deal?  Why would those offers appeal to already cash strapped consumers?

Here are the top 2 reasons why you’d want a credit card with a low balance transfer rate.

1) You Need to Pay off Credit Card Debt

Say you have an outstanding credit card balance of $5,000 and you’re paying $19.99% interest on the card.  You’ve heard it before, if you just pay the minimum balance every month, it will take you over 25 years to pay it off and cost you $9,182.73 in interest!  Insane!

So now let’s say you have a plan in place to pay off your credit card debt this year and you’re able to make a fixed payment of $500 each month to get it under control.  With your current credit card, it will take you one year to pay off the total debt and cost you $514.93 in interest over the year.

If you switch to a card offering a low interest rate on balance transfers, say 0% (you can’t get much lower than that!), then it will only take you 10 months to pay off your debt and cost you NOTHING in interest.  That’s a savings of $514.93!  And that’s why low rate balance transfer cards can be wonderful.

But be warned, if your low rate has an expiry date (in this example, the 0% interest is offered for the first 10 months and then the rate increases to the standard 19.99% interest rate) then you need a plan to pay off the balance during that period to really take advantage of the benefits.

2) You Need a Short Term Loan

Say you plan on renovating the kitchen this summer or you want to invest in landscaping for the backyard.  If you put the cost of the work on your current credit card and then switch the balance to a low interest balance transfer card, then you essentially get a short term loan for peanuts.

Given that the going rate for a line of credit these days is roughly Prime +, you won’t get a loan for any lower than 3-4% interest.  But you could get a low interest balance transfer credit card and pay a rate of 0% – 2.99%.

Again, the caveat here is that you need to pay off the balance before any rate incentive expires.  So either plan to pay off the balance a little at a time or make sure you can pay the entire amount owing at the end of the offer period (here’s hoping for a Christmas bonus!).

So I’ve convinced you that getting a low interest balance transfer card is the way to go.  Which low interest balance transfer credit cards are the best in Canada?  Here are my top three picks…

MBNA Platinum Plus MasterCard

You can’t beat 0% interest.  The MBNA Platinum Plus Credit Card offers no annual fee and 0% interest on balance transfers for the first 10 months.  The perfect card if you want more of your money going towards paying off the principal instead of just the interest.

Plus the card also offers purchase protection and extended warranty.

Learn More: MBNA Platinum Plus MasterCard >

Capital One SmartLine Platinum MasterCard

Not only do you get 5.99% interest on balance transfers with the Capital One SmartLine Platinum MasterCard, but it also has the same low purchase interest rate.  The 5.99% offer is valid for the first 36 months, which gives you a bit more time to get your credit card debt under control.  After that it only increases to a reasonable 7.99% interest rate on purchases and balance transfers.  There is also no annual fee.

Learn More: Capital One SmartLine Platinum MasterCard >

Scotia Momentum Visa Card

For a small annual fee of $39.00, the Scotia Momentum Visa Card offers 1.99% interest on balance transfers for the first 6 months.  The rate then increases to 21.99%.  But the good thing about this card is that it also offers reward incentives on purchases.  You’ll get 2.00% cash back on gas and groceries and 1.00% on everything else. So you could start using it as your everyday credit card after you’ve paid off your debt.

Learn More: Scotia Momentum Visa Card >

Independent Survey Finds Credit Cards are Leading Cause of “Debt Regret”

Toronto, ON – March 26, 2012 – As Ontarians wait to see how the Province plans to balance its budget, a new poll finds that average Canadians are no better than politicians at managing their spending. A whopping 60.1% of Canadians are not comfortable with their current level of debt, according to an independent survey from RateSupermarket.ca, Canada’s largest impartial rate comparison service. Among the 2,929 respondents from across the country, the leading cause of debt concern by far (38.8%) is credit card debt.

“We found that one of the largest contributors to credit card debt seems to be impulse purchases of small items or food and entertainment, which, left to accumulate interest, can ultimately lead to a huge mountain of debt,” said Kelvin Mangaroo, President of RateSupermarket.ca.

One third of respondents admitted to going into debt over something that they later regretted; while many cited cars or bad investments as their largest “debt regret,” the common theme that emerged was that many have found themselves in financial straits not due to large lavish purchases, but rather through frequent, mindless spending on ‘wants’ like clothing, restaurants, gifts, and holidays.

“We’re not seeing people overspending on luxury or big-ticket items,” said Mangaroo. “Rather, it’s a slow and steady pattern of small purchases combined with smaller credit card payments that are putting a huge number of Canadians into debt.”

Many of those same people are also in denial: The majority (53%) believe that they have less debt than the average Canadian (30.7% believe their debt is average, while only 16.3% believe their debt is higher than average.) When specifically asked about credit card debt, the number of those believing their debt was below average jumped to 60.8%. Only 13% believe their credit card debt is above the national average.

But the dollar amounts would seem to contradict this belief. When asked about current credit debt levels, over a quarter of participants (25.5%) indicated they owed over $5,000 to credit cards. Close to 10% indicated owing over $14,000.

About RateSupermarket.ca (www.ratesupermarket.ca)

RateSupermarket.ca is the largest impartial rate comparison service for personal finance products in Canada. Founded in May of 2008, their easy to use comparison engine provides much needed transparency to the Canadian financial market and allows visitors to quickly find the best mortgage rates, savings rates and insurance quotes. Their new Mortgage Tool App for the iPhone also allows house hunters to compare mortgage rates using their Smartphone. Over 2M Canadians have turned to RateSupermarket.ca to save money on their mortgage, insurance, credit cards and GICs.

It doesn’t take kids long to recognize the power of plastic. My oldest daughter is barely six, but if my wife or I try to use the “I have no money…” line to get out of buying another toy or treat, she’s likely to say, “Well, use your credit card.” The point being, she gets how to use them, she just doesn’t really understand how they work. But, sooner or later (much later, I hope), she’ll be applying for her own credit card. And, like all of us, long before that she should have a solid understanding of their uses, abuses, and the implications of both.

Should you give your kids a credit card? And, if so, when?

Prepaid Can Payoff

Obviously, my kids are much too young to even consider it. But when is it appropriate to hand over a card to a child? Believe it or not, it’s not unheard of for teens or even tweens to be packing plastic in their wallets. Rather than hand their kids cash for their allowance or birthday money, parents will load the currency onto a card.

It gives the kids an early lesson in managing “virtual” money, has the advantage of being much more flexible than a single-store gift card since they can use it anywhere credit cards are accepted, and even provides a degree of security since the card can be cancelled if it’s lost or stolen. The downside is that these cards come with myriad built-in fees that can quickly chip away at the balance. Then again, maybe there are lessons to be learned there too.

Student Credit Cards

Eventually though, your kids will want and need to graduate to a “real” credit card. During the summer break after my first year of university, I flew out to B.C. to meet some friends. Needing a car to get around, I popped into the nearest discount car rental agency. Unfortunately, they required a credit card – or $300 cash – as a deposit. Lacking the former, I handed over a big chunk of my intended spending money to get my hands on a set of keys. Once I was back home, I applied for the first student card I could find, beginning the lifelong process of building a credit score.

Student credit cards are a great start for many reasons. You can usually find one with no annual fee, they tend to charge moderate interest rates on balances (15 to 20 percent), and they have relatively low credit limits, so you can’t get it too much debt-trouble.

Perhaps, most importantly, they’re relatively easy to qualify for, even if you don’t have much (or anything) in the way of credit history. The fact you’re attending college or university is often enough for you to qualify. (The banks are hoping you’ll stick with them when you graduate to that high-paying corporate gig.)

Co-sign, With Caution

If you want your high-school aged kids to start learning life in the cashless world, you’ll likely have to co-sign on a card with them. While it does give you a great opportunity to show your kids how much you trust them, you will want to closely monitor the account, and minimize the credit limit so you don’t end up on the hook for months’ worth of future allowances.

Regardless of what age and what type of card you help your kid start off with, set them up with a solid understanding of how powerful – and dangerous – a credit card can be if used improperly. Then, when they do make the inevitable beginner’s mistakes – like forgetting to make a monthly payment – help them learn the lesson from it, so they’re better equipped for life.

You do all your research on the best brands and models, you comparison shop and find the best deals, you get to the store and find exactly what you’re looking for at exactly the price you expected and then, the seemingly friendly salesperson hits you with the big question: “Would you like to purchase warranty protection?”

Of course, you’re going to say no. (Read on, and you’ll know exactly why you should say no.) But, much like a six-year-old told she can’t have cookies right before dinner, “no” just doesn’t seem to be an acceptable answer.

So the sales person plys you with a shopping list of items not covered by the manufacturers warranty that this golden ticket – at a platinum price – does, offering you up a little folder with all the details. But you just want to get home and play with your new toy. So you’re not going to carefully read all the fine print (and it’s almost all fine print) to figure out what this piece of paper covers and, more importantly, what it excludes.

Only a sucker buys the in-store extended warranty at the checkout counter. Don’t be a sucker.

You don’t need it and, if you do, it probably won’t be valid

Almost everything you buy comes with some sort of warranty covering manufacturing defects. Granted, it may only provide coverage for a month or a year, but if you really did get the lemon built by the Friday afternoon shift at the factory, odds are it’s not going to work the minute you open the box.

Typically, that generous “three-year” plan likely only kicks in after the coverage by the manufacturer expires and, short of a really big ticket item, how many of us are going to remember two-and-a-half year’s later that we paid an extra $100 for an extended warranty.

I’ll never forgot the time I popped into a nearby electronics store looking for a cheap pair of old-school headphones so my daughter didn’t have to use ill-fitting ear buds. They were on sale for less than $8. The salesman offered me a three-year warranty for $5. Yep, a warranty that cost two-thirds the product price. I didn’t even have to look at the proffered form to know that no matter how soon this-disposable-by-design headset eventually did break, there’d be some sort of rider (“Cannot be used by six-year-old girls to watch portable DVD players”) that voided by coverage.

It’s overpriced

Even when you do need repairs, watchdog consumer advocacy magazine Consumer Reports found that, “When breakdowns occur within the extended-warranty period, the average cost of repairing the appliance is not much more than the average price paid for the warranty.” In other words, pay for the warranty upfront and you’re guaranteed to pay about as much as you may have to pay if the item happens to break down.

And here’s the dirty little secret that the store’s not going to tell you: The margins on extended warranties are WAY higher (50 percent or more) than the profits they’re earning on the product itself.

You can find better

Even if you’re really worried about something breaking down the proverbial day after your manufacturer’s warranty expires, there are better options. If you purchased the item using a credit card, chances are you probably already have coverage. (Read the fine print on your cardholder’s agreement.)

If not, consider third-party extended warranties. One popular option is a company called SquareTrade, which offers warranties on everything from cellphones to appliances. They claim to provide comparable coverage to retail warranties for as much as 60 percent less in fees, and significantly lower deductibles on claims.

But, just like you did before you walked into the store, do your homework on the warranty company – how much it’ll cost, what it’ll cover, what is excluded, and how easy or difficult it is to make a claim – before you sign on the dotted line.

It’s a classic hectic January shopping moment: you’re at the checkout, about to drop a pile on some last-minute deals, and the cashier asks if you’d like to sign up for the store’s credit card.

The application process won’t take but a minute and better still you can get an even better deal on your purchase. Maybe a percentage discount, or a don’t-pay-for-x-number of days thing.

Why not? Because there are some serious problems with store credit cards. They offer a sneaky way to reduce your credit rating, get yourself into debt and entice you to shop more.

Here a run down of the downsides:

High interest rates

These cards have rates in the 25% to 30% range. Your regular credit card should be lower than that! So if you leave a balance on your purchases it could take months or even years to pay it off, as that interest keeps building when you have a balance.

Your credit score

The more credit you have to your name, the higher your debt load, and the worse your credit score. This is particularly a problem if you get pulled into signing up for several in-store cards with high limits. This can compromise your chances of getting loans, even if your balance is at zero.

Managing your debt

When you have numerous cards — plus a car loan and a mortgage, for instance — your debt is all over the place and is much harder to manage. You may focus your efforts on paying down your main card and think all is well. Then, bam! You get that store credit card bill in the mail and there’s money owed there too.

Buying more

When you have a store card, you’re tempted to dash out to that store more often and make use of the promotions, points and bonuses offered through your card. Those promotions are great: but there’s a big chance they encourage you to shop more, get stuff you don’t need, and even purchase items at higher prices than you would pay elsewhere.

Initial deals

When you sign up for a store card, you often get 10% or 20% off your initial purchase. That’s great. But what if you’re just making a small purchase that day and head back to buy a couch or all your kids’ spring clothes a few weeks later? You’ll likely throw away that great initial deal if you sign on for a card on the spur of the moment.

Making store credit cards work for you

So, how to make the most out of those store credit cards?

• Only sign on for a card for a company you truly use. Gas cards, home reno store cards if you are doing a lot of fixing up, come to mind. Get one of these cards, two max, and leave it at that.
• Know the points and rewards systems on the few cards you have and truly take advantage of them. If there’s a cardholders discount day, hold off on purchases until that day. Keep track of and redeem your points.
• Read your bill statements every month and make sure your credit limit is low, your interest rate is being fairy charged and you’re not falling prey to any find print you missed reading when you got the card.
• Fully pay off these cards each and every month. If you can’t do that, get rid of the card or consolidate your debt with a loan or line of credit.

Store credit cards are like any other form of credit. They can be great by allowing you access to the stuff you want and need, often at a discount. But they have their perils — so buyers beware.

If you’ve been reading this blog for a while, you know that one piece of advice we constantly try to hammer home is that you should pay off your credit card balance in full every month to avoid the high interest rates you’d otherwise be charged.

But the unfortunate reality is that sometimes we just don’t have the funds available to cover large unexpected costs – like a car that won’t move or a toilet that’s flowing in the wrong direction, both of which recently happened to me in the same week.

The next piece of advice is to set up a line of credit so you have some funds available to pay your bills at a much lower interest rate than the rates credit cards charge.
But if you don’t have a home or other large asset to back a secure line of credit, and your credit rating has too many red flags (from all those bills you’ve been late in paying), you might not qualify for a line of credit.

If that’s the situation you’re in, then forget about cash back or air miles programs. You should focus on getting yourself a credit card that will charge you the lowest amount of interest if and when you do need to carry a balance. Here are some of the best low rate credit cards in the market.

American Express Air Miles Credit Card

The American Express Air Miles credit card is a no-fee card that offers the lowest rate out there, 2.99 percent, though that’s only for the first 12 months. After that it jumps to 19.99 percent. Still, it’s a great option for someone who anticipates cash flow issues for a year – say when you’re planning a major renovation, or going on maternity leave.

And if you’re already collecting Air Miles, it’s a great way to grow your account, with a bonus of 150 miles when you make your first purchase, and earn additional miles for every $15 to $20 spent using the card. It also includes travel accident insurance and extended warranty coverage on purchases.

Capital One SmartLine Platinum MasterCard

The Capital One SmartLine Platinum MasterCard is another no-fee card with a very favourable rate of only 5.99 percent. For the first three years, it also comes with a “balance transfer” rate of 5.99 percent, effectively making it a fixed-rate line of credit. The card includes travel and rental car insurance, and extended warranties on purchases, but you do need to have an excellent credit rating and minimum household income of $40,000 to qualify.

Scotiabank Momentum No-Fee Visa

The Scotiabank Momentum No-Fee Visa is a no-fee card with an interest rate of 7.99 percent – albeit for the first six months only, after which it jumps to 19.99 percent. The big bonus with this one is that you earn up to 1 percent cash back on your purchases, helping you build a nest egg to pay down debt. Like the Amex Air Miles card, this is a good short-term option for temporary monetary shortages. It also includes discount car rentals at Avis.

MBNA Gold MasterCard Fixed 9.99 APR

When you’re self-employed (like a freelance writer and blogger), or work in a seasonal industry like farming or fisheries, your income can come in fits and starts. But your daily expenses tend to stay the same. So if you anticipate periods where you just won’t have money available to pay off your credit card bills for the long-term, it’s worth looking at the MBNA Gold MasterCard with a fixed 9.99 percent interest rate – about half of what most cards charge. It’s higher than the Captial One SmartCard, but you only need to show a household income of $35,000 and carry a good credit rating to qualify. There’s no annual fee and it includes purchase protection and extended warranty coverage.

MBNA Platinum Plus MasterCard

And here’s a bonus card to consider, the MBNA Platium Plus MasterCard. While the interest rate on new purchases is up there at 17.99 percent, the really enticing part is that there is no interest (as in zero percent) on balance transfer for the first 10 months. So if you have fallen behind on your payments on other cards, sign up for this free card and you’ll earn yourself a 10-month grace period to start paying off the debt. At the end of that, if you’re still in the hole take another look at one of the low interest credit cards above.

RateSupermarket.ca Shows Credit Card Shoppers How to Save Hundreds This Holiday Season

TORONTO, November 24, 2011… RateSupermarket.ca, Canada’ s go-to-website to compare and save money on credit cards, mortgage rates, and savings accounts, is challenging consumers to rethink their credit card strategy this holiday season. Credit cards aren’t just for spending money, but for saving money as well.

A recent poll from CIBC suggests only 31% of Canadians plan to use their credit card for holiday shopping this season. According to RateSupermarket.ca, that number should be higher.

“It’s very easy to spend money on your credit card and rack up a larger bill than intended,” says Kelvin Mangaroo, president of the rate comparison site. “But, if you can stick to a budget and pay off your credit card balance on time, then yes, consumers should be putting more of their Christmas purchases on plastic.”

Why? The rewards. Particularly cash back rewards. Not only are cash reward programs easier to determine how much you’re really getting back (because we ALL know the value of $1 vs. 700 points), but cash can be spent on whatever YOU want… in other words you aren’t limited to a rewards catalogue.

Based on average Canadian household spending patterns from Statistics Canada, a typical household can save $562* in the first year by using a cash back credit card for their purchases. Over 5 years, that savings jumps to $2,382*.

Get even smarter with your cash back and you can turn your $2,382 in savings into even more. Pay off your mortgage faster with lump sum payments and save yourself an extra $685** in interest. Or put that cash in a high interest savings account and bank an extra $153***.

A new toaster or a movie voucher can’t do that.

All the reasons why Cash is King are laid out in this handy infographic:

http://www.ratesupermarket.ca/blog/cash-back-rewards-credit-cards-infographic/

“With the holiday season right around the corner, consumers will likely go over their normal average monthly spend. I say, be smart when you spend, use a cash back credit card and start racking up the savings,” says Mangaroo.

* Refer to infographic for calculation details: http://www.ratesupermarket.ca/blog/cash-is-king-infographic/#INFO
**Annual cash back was put towards annual lump sum payments on $250,000 mortgage, amortized over 25 years at a rate of 3.52% (the average best 5 year fixed rate from Sept 2010 to August 2011 as seen on RateSupermarket.ca.)
*** Annual cash back was put into a savings account with a 2.00% interest rate.

About RateSupermarket.ca (http://www.ratesupermarket.ca)
RateSupermarket.ca is the largest impartial rate comparison service for personal finance products in Canada. Founded in May of 2008, their easy to use comparison engines provide much needed transparency into the Canadian financial market and allow visitors to quickly find the best rates. Over 1.5M Canadians have turned to RateSupermarket.ca to save money on their mortgage, insurance, credit cards and GICs.