Ratehub.ca Roundup: December 2017
Debt is on everyone’s mind as interest rates tick upward and dollars fly out of your bank account this holiday season. Here are some personal finance headlines you may have missed last month.
Loblaw to merge Shoppers Optimum and PC Plus loyalty programs
Three years after acquiring pharmacy chain Shoppers Drug Mart, grocery behemoth Loblaw Companies Ltd. announced it’s merging the stores’ loyalty programs. The new unified PC Optimum program will start on Feb. 1, 2018. The Canadian Press reports consumers can continue collecting points until February, when their Shoppers Optimum and/or PC Plus points will be converted to the new program at equal value. PC Optimum points will live on a single card or app and can be redeemed in increments, with 10,000 points valued at $10, 20,000 points at $20, etc., up to a maximum redemption of $500 for a single transaction. If you’re enrolled in one or both programs, you can enter your existing points to see how much they’ll be worth using the PC Optimum points calculator.
New mortgage stress tests could disqualify 10% of buyers: Bank of Canada
About 10% of prospective homebuyers could be disqualified when tougher mortgage rules take effect on Jan. 1, 2018, according to the Bank of Canada. As reported by The Globe and Mail, the central bank’s semi-annual financial system review expects the impact to be concentrated in the Toronto and Vancouver markets, but says the new stress test could stymie $15 billion a year in new borrowing. Governor Stephen Poloz said in a statement the bank will continue to keep a close watch on “vulnerabilities” such as rising household debt and overheated house prices.
How Canadian homes became debt traps
This feature from Maclean’s is a must-read on the financial phenomenon one expert calls “extend and pretend”: People with good jobs and income living way beyond their means and putting much of their expenses on credit, and in some cases borrowing against their property with a home equity line of credit (HELOC), until they’re drowning in debt. Full-on insolvency is actually rare, but part of that is the record-low interest rates Canada had for almost a decade. As the Bank of Canada gradually raises its benchmark interest rate and rates on variable mortgages and loans tick upward, many Canadians could find themselves pushed over the edge.
Another necessary read from the Financial Post on the complex cases of two women whose identities were stolen to commit hundreds of thousands of dollars in mortgage fraud. This story lays out some unnerving realities: fraud rings are a thing, punishments on criminals is light, and no one can 100% protect themselves against identity theft. Seriously — one of the victims interviewed is a forensic accountant who spent 300 hours investigating her own case and still doesn’t know how thieves stole her personal information.
The end of cash? Not any time soon, Bank of Canada report says
Cash is still king in more than half of all transactions in Canada, according to a new report. The Bank of Canada found that in 2015, 51% of transactions across all types of merchants were conducted in cash, 31% using credit cards, and 19% using debit. But in terms of overall dollar value, 42% of the total value of sales in Canada involved credit cards. What’s interesting is the hidden costs: the bank found Canadian merchants spent $10 billion on processing fees in 2014, two-thirds of which came from credit cards. The average credit card transaction cost a merchant $2.08 to process, compared to 30 cents for debit and 29 cents for cash.
For the aggressive saver, better interest rates are there for the taking
Sage advice from columnist Rob Carrick: “Passive savers who take what’s offered by their bank get left behind.” Competition between banks can work in the consumer’s favour, but only if you actively pursue the best rates. Carrick offers three ways you can be more aggressive to get a higher return on your savings. To get a better rate, compare the best high interest savings accounts.
Ratehub.ca updates
Deloitte named Ratehub.ca to its Technology Fast 50 list, which recognizes “Canadian technology companies for their entrepreneurial spirit, innovation, rapid revenue growth, and world-class achievements.” Ratehub.ca is ranked #32, with 768.7% in revenue growth from 2013-16.
Writing for the Financial Post, co-founder and CEO Alyssa Furtado explains why businesses should invest in their employees’ financial literacy.
Check out chief marketing officer Kerri-Lynn McAllister’s profile on the career blog Be The Next Her.
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