Category Archives: Money Tips

Why Does Everyone Offer Me a New Credit Card and 10% Off my Purchase?

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It seems some days when I’m trying to make a quick run to buy groceries, sun block, socks for my kids and fill up the gas tank that I’m greeted everywhere by the same questions “Hi! Do you have our credit card? No?! Why not apply now and get free groceries/drugstore rewards points/10% off your purchase/two cents a litre discount.” It seems like everyone wants me to get a new credit card. Why?

Employees Often Have Quotas for Credit Card Applications

My first suspicion was that employees are getting judged based on whether they can sign up new customers for the store’s current credit card. They likely have a quota of new applications they must try to find. So if they get 5 people to sign up for the card this month, they look good to their boss, and maybe they even get a small reward.

So I asked a clerk at a major retail store. Yes, she agreed, they are supposed to get a certain number of applications per month. While at her store the employee would not get fired if they didn’t get the applications everyone knew that getting them was a good thing promotion-wise.

That wasn’t the significant reason, though. She was honest and admitted to a second incentive:

Kickbacks (Or Cash Bonuses) for New Credit Card Applications

The stronger incentive for some employees to push company credit cards is a specific financial reward. At some stores, the person who talks a customer into applying for the new credit card personally earns cash. The “sign up” bonus can be significant: from $25-150 per application!

(It’s important to know that not all employees get a cash reward if you sign up for a card. Sometimes they are pushing the card just to keep their job.)

Some sales people will even tell you that if you apply, they will get some cash, and ask you to help them out by applying. Sounds harmless, right. But should you?

So I Can Help the Cashier by Signing Up, Should I Go For It?

What can go wrong by applying for a bunch of cards you don’t want or need just to help someone out?

First, each time you apply for a credit card, there is the potential for a mark to be added to your credit rating that reduces your rating. It doesn’t have to be applied. It isn’t always applied. But there is a chance. Applying for one unnecessary card obviously isn’t going to be a big deal. But applying for a dozen unnecessary cards isn’t a great idea.

Second, each time you apply for credit you are increasing your chance of a financial identity theft. Again, it isn’t a large risk, but it is a risk. Watch what happens when you provide all that personal info for the card. Do they just stick the papers beside the cash register? Do they just slide them into the register? When will they get sealed up so no one can easily copy them? Where will they be sent and when and how many hands will they pass through on the way? The risk varies but if you don’t really want the card why take any risk?

Third, if you don’t cancel the card you have increased your overall borrowing limit. Say you are approved for 10 cards each with a $500 limit. That’s $5000 of new credit available to you. This can sometimes be a factor when you need a loan or a mortgage. Some lenders will look at all of the sources of credit you have available and assume that you are at the limit on each of them. They then use that liability as part of their calculations of how much you can afford to pay a month on a new loan or mortgage. This calculation is not always done but it was done to us in the past when we applied for a mortgage with a big bank. It was sobering to realize that just having a lot of credit, even if we weren’t using it, could cause problems with a big loan. Why add credit you don’t need or want to your file?

Fourth, the temptation to mis-use your credit increases. The more cards you have, the more likely it is that you will forget to make a payment one month or that you will spend a little more than you planned because the card is right there unused. Again, this is not a major problem for most people but judging by shows like Till Debt Do Us Part it is a significant problem for some people.  Gail Vaz-Oxlade wouldn’t have to tell people to cut up all of their credit cards but one if they didn’t have many, many cards.

Just Say No to New Credit Cards

The fastest simplest way to handle these offers for new credit cards is to just say no. If you have trouble saying no, you can even lie and say you have one already but left it at home. No matter how many incentives they offer, no is still the best answer.

No Credit Card Rewards for Me, Alas

Some of you may have noticed I don’t run ads personally for credit cards on this site. Unfortunately, that means I’m not getting any of those lovely cheques for $125 for convincing someone to sign up for a new card. I’d love the cash but I wouldn’t encourage anyone in my family to apply for a new card, so I don’t feel comfortable recommending my readers apply either.

Sometimes my context-based advertisers (like Google AdSense) may run ads for credit cards. I don’t get paid anything from the credit card company if you apply after reading one of those ads. If I’m lucky, I might get a few cents if you click on the ad, though. I don’t  control whether AdSense runs those ads or instead runs ads for debt consolidation businesses or penny stocks, nor do I know what ads AdSense is presenting on your screen. The ads vary for each reader.

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Do you get tired of always getting asked to get another credit card? Do you bother having more than one credit card and one low-limit card to use online? Please share your preferences with a comment.

How to Transfer Cash to an RRSP at ING Direct from another RRSP Using a T2033 Form

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Many years ago when RRSP season rolled around we didn’t have much cash available to make a contribution. We did, however, have compound interest Canada Savings Bonds with good long term rates. At that time the government offered a program called the Canada Retirement Savings Plan. This plan allowed you to hold Canada Savings Bonds directly in a RRSP account. There were no fees to transfer bonds into or out of the plan. (An actual withdrawal of the bonds or their equivalent value was taxable.) So we phoned the 1-800 number before the February RRSP contribution deadline and then mailed our bond certificates in to Ottawa. There the bonds sat continuing to churn out annual interest which was in turn reinvested and earned more interest. Until eventually, the bonds matured. Alas, the recent federal governments have regrettably been trying to shut down the Canada Savings Bond programs. So the days of decent interest rates are, at least temporarily, over. It is time for us to move our investments as they mature out of the Canada Retirement Savings Plan and into other places. This is how we transferred the cash from a Canada Retirement Savings Plan to our ING Direct, now Tangerine.ca, RSP Investment Savings Account.

This same procedure works for a transfer from any bank or financial institution to ING Direct Tangerine.

UPDATE: Please be aware that as of January 2015, Tangerine has started charging a fee if you transfer your RRSP or TFSA from Tangerine to another bank, credit union, brokerage or financial institution.

I would no longer transfer RRSP or TFSA money to Tangerine unless I planned to keep it there for the long term.

To Transfer Cash to a Tangerine RRSP from another RRSP

To Log In to Tangerine

  1. Go to tangerine.ca
  2. Click on the I’m a Client, let me in link.
  3. In the Log me in text field, type your Client Number, Card Number or Username.
  4. Click on the Go button.
  5. In the Answer field, type the answer to Your Secret Question.
  6. Click on the Next button.
  7. Verify Your Picture and Your Phrase are correct. Then In the Personal Identification Number field, type Your PIN.
  8. Click on the Go button.

***BONUS***
Unlike most financial institutions, ING Direct Tangerine will begin paying you interest on the cash you transfer to your ING Direct Tangerine RRSP starting on the date that the RSP Direct Transfer transaction request is completed. To receive the interest, the funds must be transferred by the other financial institution within 60 days after the request is submitted.

***BONUS***
At the time this was written in June 2013, ING Direct Tangerine does not charge any fee to transfer RRSP money out to another bank or financial institution. [It still doesn’t in March, 2014.] So for now we’re moving our money from the Canada RSP into ING Direct Tangerine. Then it may move again to CIBC Investor’s Edge or BMO InvestorLine or RBC Direct Investing. So many choices!

***BOO-HOO***
Unfortunately, at the time this was written ING Direct Tangerine will not generally pay any fees you may be charged by the other bank or financial institution for transferring money out of their RRSP plan. So, for example, if CIBC charges you $100 to transfer out your RRSP, ING Direct Tangerine will NOT reimburse you this amount.

To Get and Complete the T2033 Form from Tangerine

  1. From the links listed on the left side of the screen, click on Transfer RSPs.
  2. Read the instructions. You will complete the form online, print it out, sign it and mail or fax it to Tangerine.
  3. Click on the Next button.

For the Amount section

  1. Click to select either
    • Transfer all my funds, or
    • Transfer a partial amount
    1. If you select to transfer all your funds, in the Approximate value $ field, type about how much money should be transferred.
    2. If you select a partial amount, in the $ field, type the amount
  2. Read the warning that your other institution will probably charge you a fee to make the transfer. These fees are often $100 or more.
  3. From the drop-down list, select which Financial Institution from which you are requesting the transfer.
    • If it’s not listed, select Other.
    • For Other, also type the Name of the Financial Institution in the field with that name.
      For the Canada Retirement Savings Plan, I typed: Trustee CSB Registered Products
  4. In the Account Number field, type the account number for your RRSP at the sending financial institution.
  5. In the Name of Plan field, type the descriptive name for the RRSP plan your money is currently in.
    For example, I might type

    • RRSP Daily Interest Savings for my CIBC RRSP account; or
    • Canada Retirement Savings S045 for my Canada Savings Bonds retirement bond series.
  6. As directed, type in the postal code for the sending bank and click on the Get Address button.
  7. If it can the Tangerine computer will put an address in the Street #, Street Name, City and Province boxes.
    If fields are left blank or are incorrect, type and select the information to provide the mailing address for the financial institution that will be sending the RRSP money to Tangerine.
  8. From the drop-down list answer Yes or No for whether you a trying to transfer a GIC.
  9. Click on the Next button.

In the Investment Section

  1. Choose where you want the RSP cash to be invested once it arrives at ING Direct Tangerine. You can choose
    • an existing RSP ISA
    • a new RSP ISA
    • a new short-term RSP GIC
    • a new RSP GIC
  2. If you select your existing RSP ISA it will ask you to select the appropriate account from the drop-down list.
  3. If you select a new short-term RSP GIC it will ask you to select the Term and the Renewal Options.
  4. If you select a new RSP GIC, it will ask you to select the Term, Renewal Options and whether to Compound the Interest each year it is earned, or whether to deposit the interest annually into another RSP investment.
  5. Click on the Next button.

If you are not transferring to an existing RSP ISA, a Legal Section will open.
In the Legal Section

  1. Read the anti-money-laundering information.
  2. From the drop-down list select whether any third party or other person will benefit from this account. (The usual answer is No.)
  3. Read the legal terms about applying for an ING product. From the drop-down list select whether you accept the terms.
  4. Click on the Next button.

In the Summary Section

  1. Review all the information for your request to transfer RSP money from one financial institution to ING Direct Tangerine.
  2. If the information is correct, click on the Submit button.
  3. Print off the T2033 form.
  4. Click on the Log me out tab.
  5. For increased security, close your browser session.
  6. Sign and date the form.
  7. Mail the form to ING Direct Tangerine or fax it.
    As of June, 2013, the address for ING Direct Tangerine is:
    ING Direct Tangerine
    111 Gordon Baker Road
    Toronto, Ontario
    M2H 3R1
    As of June, 2014, the address for Tangerine is:
    Tangerine
    3389 Steeles Avenue East
    Toronto, Ontario
    M2H 3S8
    Also mail or fax a copy of your most recent RRSP statement from the sending bank or financial institution. (This helps the two companies be sure they are talking about the same RRSP investments.)
  8. WAIT.

It can often take 2-6 weeks for the transfer to be made.

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Did you join the Canada Savings Bonds Retirement Plan? Are you sorry to see CSBs on the endangered investments list? Please share your opinions with a comment.