My Search for a Travel Rewards Credit Card

Recently my credit card came due for its bi-annual replacement so I wanted to check that I am still getting the best deal. Travel rewards credit cards give you points for what you spend that can be redeemed for travel or possibly merchandise. Not surprisingly, offerings vary quite a lot between card companies and there is lots of devilish detail and fine print that can turn a seemingly good deal into a disappointing choice.

Two web sites that I found to be extremely useful with lots of detailed comparative info and unbiased advice:

• Rewards Canada - almost one-stop shopping for the features and costs of available cards, saves a huge amount of work flitting around vendor sites with its large spreadsheet-like comparative table. It seems to be quite up-to-date with the latest temporary bonus offers and specials. There is even a top 5 credit cards for 2010 article. The same web owner runs sister sites for the UK FrequentFlyerBonuses,co.uk and for worldwide FrequentFlyerBonuses.com.
• Financial Consumer Agency of Canada - yes, that's right a federal government agency actually can manage to supply useful information at its section on credit cards. The unique info, not found on the Rewards Canada site, is the table of extra fees and charges, and particularly for the traveller, the Cash advance fee outside Canada and the Converting transactions made outside Canada into Canadian currency (which, frustratingly, is 2.5% in the vast majority of cases)

The tables are invaluable for quickly eliminating cards that do not meet basic criteria e.g. for me, I absolutely want a card with Auto Rental Loss/Damage Insurance (which avoids needing to pay the usurious daily fees charged by rental companies to cover any damage, whether it's your fault or not; funny that if you decline the rental company coverage, they do not ask for proof that you have other cover, which of course means the rental company has its own insurance for damage and you are only lining their pocket ... but since you must sign on the rental agreement that you will pay for damage, you still are wise to get some insurance from somewhere). That meant, for example, eliminating the American Express Blue Sky card.

Despite the top 5 article mentioned above, my eventual choice did not settle on their top-rated RBC Visa Avion Card. Instead the separate Travel Anywhere Credit Comparison showing rewards redemption values versus spending required focused my choice initially on the Capital One Aspire World MasterCard. It seems to offer the best spending to reward ratio. Note the word "seems".

The fine print on the card reward scheme, found only by drilling down into the Capital One website, has some tricky conditions that ensure almost no one will be able to get full value from their points and achieve the seemingly best-in-class rewards. The tricky bit is buried in the Important Disclosures document you see only after starting the application process under the heading Reward Miles Redemption, where it says: "... The reward mileage requirement is as follows: 15,000 reward miles are required for tickets up to $150.00; 35,000 reward miles are required for tickets from $150.01 up to $350.00; 60,000 reward miles are required for tickets from $350.01 up to $600.00. For tickets over $600.00 in value, the required number of reward miles will be determined by multiplying the cost of the ticket by 100 (ex. $741 ticket requires 74,100 reward miles). You need to have the minimum reward miles required in order to redeem - partial redemptions will not be processed." In other words, you cannot buy a $500 ticket and top up the missing $100 you need. You must always use more points than the cost of the ticket. Unless you spend big amounts every year on the card - like $25,000 - you won't get to the 60,000 level of points where the no top-up point loss penalty gets less onerous. For me at least, it would be far too long before enough points for trans-Atlantic flights ($1000+) could be useful. Lesson, read the fine print.

After hours of reading the fine print, I literally came back to the place I started - my existing TD Travel Visa Infinite card. Not that TD Visa is the most wonderful outfit ever (see my own less than wonderful experience with them here and here). But their rewards accumulation and their redemption methods (especially where one gets triple the points when booking travel through their own travel agency, which I have found to be responsive and easy to reach) fit my current lifestyle. The devil is in the details and it is the devil I know.

TD Visa Makes No Promise to Refund Zoom Tickets

When discount air carrier Zoom Airlines went out of business August 28th, some credit card companies like MasterCard and American Express were quick to issue public statements that they would refund amounts for tickets bought with their credit card. The Canadian Transportation Agency post of Oct.24th also lists some travel operators who made promises to refund.

Visa issued no such statement but I assumed that Visa would merely follow suit. It appears now that Visa's policy is different. Having applied in writing to TD Visa with all the necessary documentation within days of Zoom's demise, I have received a partial refund in mid-October. In a phone call with TD Visa's disputes department the other day to ask about the remainder, I was told by a certain "Andrea" (why does no one at these customer service lines ever have a last name?) that Visa does not promise to refund me, it only undertakes to request a refund from Zoom's bank on my behalf as a secured creditor. That has two consequences: if the collateral assets are insufficient, there won't be a full refund and; it will take a lot longer to get the money back since Visa waits till it receives funds from the bankruptcy, which can take a long time. For a card that presents itself as a premium travel card, that pretty pathetic on TD Visa's part. Beware folks, as is too often the case, the fine print and the company's behaviour don't live up to the marketing hype. It's time to look for another credit card.

In the UK, there is a useful discussion on MoneySavingExpert of experiences with various credit and debit card providers in making Zoom refunds.

Signs of the Time We Live In

A 24 year-old arrives for his first day at work as a trader at Lehman in London only to find that everyone has been fired and he will have no job (see BBC It's Like a Massive Earthquake. His starting salary was to be £45,000. A Head Teacher (a Principal in Canadian terms) of a primary school in Scotland, responsible for 300 children and a staff of 20 after 30 years experience earns a few thousand more. Perhaps like those in the tech industry where the crash forced lots of smart, ambitious people into other industries where their talents could be applied to better uses, this young man might also redirect his future?

A UK consumer misses their payment of a very small balance on a credit card. Instead of happily letting the balance accumulate interest and perhaps even increasing the credit limit as in former times, the UK credit card company freezes the account and tells the person that this is for their own good! Person pays off balance (with punitive fee) but is unable to make purchases on the card for a week. Economy gets zero discretionary spending during that week. Said person had never previously missed a payment, this one being forgotten due to the small amount. Said person also has zero other debt and healthy bank balance that could easily support a balance ten times the amount paid late. Is the financial sector in a state of panic tightening that will unduly restrict spending and deepen the recession now underway?

The Lowdown on the Most Popular Canadian Financial Comparison Websites

Oops sorry, this is going to be a short post, there seems to be only one, the http://www.moneytools.ca/ of the federal government's financial and consumer agency of Canada. (Thank you to fellow blogger Million Dollar Journey who posted about this site back in March) It is really a rather feeble attempt as it only compares actual products for bank accounts and credit cards, and even then the data is not real time up to date. The only hard fact comparison of discount brokers seems to be on a blog - Million Dollar Journey's post here.

Readers will note my post of yesterday on such websites in the UK, which has a wide range of very good sites. What is wrong with Canada that we don't better? One thing for sure is that the financial services and products market in Canada is pathetically thin and uncompetitive in comparison to that of the UK.

The Lowdown on the Most Popular UK Financial Comparison Websites

Just came across a fabulous report - Compare and Contrast: How the UK Comparison Website Market is Serving Financial Consumers - released by the Resolution Foundation on October 11, 2007.

The report assesses the eight most popular financial comparison websites serving the UK market along with that of the regulatory agency itself, Financial Services Authority:

• www.moneysupermarket.com
• www.fool.co.uk
• www.uswitch.com
• www.moneynet.co.uk
• www.moneyexpert.com
• www.moneyextra.com
• www.moneyfacts.co.uk
• www.kelkoo.co.uk
• www.fsa.gov.uk/tables
• 
  
• www.themoneypages.com - not on the report list but another one I think is worth a look
  

The areas assessed include: mortgages, credit cards, loans, savings and car insurance. From reading the report it seems that mortgages and car insurance are especially tricky areas to get accurate and complete quotes online as many questions need to be asked to get it right and the various websites vary in how well they do it.

Though it specifically states that the aim of the study is not to determine which is the best, the detailed and impartial comparisons give a consumer a pretty good idea of which one is good or not so good in which area. I really like that the comparison dimensions used in the study are all of critical importance to a consumer: accuracy, completeness and impartiality of the information provided, explanation of technical terms, relevance of fact finding to provide an accurate quote, consumer ease and flexibility in searching and sorting results of the website and facility to contact the providers directly. Interesting factoid: not all providers participate in the comparison websites - Royal Bank of Scotland does not, per the report.

The report does conclude, however, ''there was no “all round best performer”''. It does say the websites perform a very valuable service (i.e. they are not slimy, evil things to be avoided), a re-assuring statement since so many people use them and since the number and complexity of financial choices keeps rising. In fact, some of the sites were found to provide better information on secured loans than the providers themselves! The main criticism is that some of the websites don't properly disclose when their editor's choice or best buys are actually the result of commercial sponsor ties and not the objective best value product.

Here's my summary (caveat emptor, it may not be 100% the way you would read it or the way the authors would say it) of the results:
1) Accuracy of product info - the best: moneysupermarket and MoneyExpert; FSA and uSwitch the worst
2) Accuracy of product quotes - the best: MoneyExpert and Moneyextra; Kelkoo is awful
3) Completeness of info - varies between products more than sites; info on mortgages ''generally poor''; Kelkoo weak across the board
4) Relevance of fact finding - generally poor across all sites for mortgages, credit cards and savings; Motley Fool, MoneyExpert and Kelkoo miss key info in every product
5) Terms explained - moneysupermarket best due to forums where people can ask experts; Motley Fool, uSwitch and FSA explain all terms while Kelkoo explained none and has no product guides
6) Consumer experience - MoneyExpert the best by a lot; Kelkoo is c-r-a-p
7) Flexibility - Moneynet the best, Motley Fool not far behind; MoneyExpert the pits, while moneysupermarket is not much better
8) Market coverage - no one wins but Kelkoo loses with ''low coverage''
9) Impartiality - Motley Fool and uSwitch exemplary by being ''frank and open''; moneysupermarket, Moneynet, MoneyExpert and Kelkoo are completely unforthcoming about their editor's choices as being based on commercial relationships
10) Ability to act on info - Motley Fool, MoneyExpert and FSA are the leaders; the others all only give contact info for affiliated providers (is it so hard to look them up yourself if you have their name?)
About my only overall conclusion is to not bother with Kelkoo; it scores lowest on too many dimensions and is really good in none.

Now that you be aware, you can also beware.

Well done to the Resolution Foundation, an organisation devoted to improving the financial capabilities of the low and medium income person.

Update October 29 - we used moneysupermarket today to get car insurance quotes and found one that has saved us several hundred pounds for the coming year. It was very slick, we were even able to complete the deal directly with the provider by phone after generating the quote online using a quote. There were no less than 26 different quotes and there would have been more except a bunch of providers don't want to insure recently arrived Canadians. Very impressive, took about 30 minutes from start to finish.

Credit Card Negligence

Yesterday, I was checking my credit card balance and transactions using Visa's automated telephone system and noticed a charge of $1600 from Air Canada that I had not made. A worried call to the TD Visa security center and a review of recent transactions suggested that it wasn't fraud but negligence, both on Air Canada's part in submitting the charge under my card number and on Visa's part in accepting the charge with - obviously - insufficient validation.

Air Canada does not have my card details on file. The Visa rep could not tell me what actual validation took place, though I know it can have only been to accept the card number presented, i.e. no expiry date, name of cardholder, address or other details was required by Visa. Air Canada could not have had the full details, even using Aeroplan, since the card details that were stored on Aeroplan (not any longer, since they've now been erased ... at least, I think so; who knows whether Aeroplan has kept them anyway) included an old expiry date. So any transaction that would have referred to Aeroplan would have had the wrong expiry date and the transaction would/should have been rejected by Visa. Ironically, yesterday I did try to make a booking on Air Canada through the Internet using Aeroplan's old card details / expiry date and Visa rejected my genuine attempt to book on Air Canada.

The Visa ''I only deal with fraud'' rep then blithely told me it was my ''dispute with the merchant'' and I had to get in touch with Air Canada to get my money back. There was no question of simply cancelling the charge, even despite the fact that the charge is so recent that it hasn't appeared on my current balance due statement.

Huh? How does this happen? Any merchant with an account with Visa can simply supply your card number and Visa will stick any charge up to your credit limit on your bill? And on top of that, the error which you had no part in creating is one where you must chase after the merchant to get a reimbursement? Apparently so.

TD Visa's published security advice on this matter is vacuous and insultingly misleading:
''Check your monthly statement carefully and report billing errors to your credit card issuer as soon as possible and always within 30 days of the statement date.'' They neglect to add, ''so we can tell you to go fix them yourself.''

Incidentally, the incorrect charge by Air Canada was apparently a telephone transaction, not one via the Internet, so it isn't a question of online security. I learned this by contacting TD Travel Rewards, the travel agency connected to the TD Visa card, which I had phoned in trying to figure out what was going with the charge.

There, fortunately, the rep did help by contacting Air Canada and finding someone there who admitted that the charge was an error and who promised to reimburse my account within 48 hours (fingers crossed that it actually happens). Kudos to Sheng at TD Travel Rewards for outstanding customer service since she didn't have to fix it since the error had nothing to do with TD Travel but knew where to go and extracted the promise to reimburse me from Air Canada. A raspberry to TD Visa for its unfair policy and to rep Jomo for crappy customer service in refusing to do anything about TD Visa's negligence.

The big question is how to prevent this from happening again in future and short of cancelling all credit cards, I am a bit at a loss. Peripherally, it may help a bit to never leave any credit card details on any website or with any vendor. Having as low a credit limit as possible probably would help too but then, with too low a limit, what good is having a card?

Maybe some folks out there have some suggestions? Are some cards better than others or is this endemic to the way all credit cards run their operations? This website describes a system used for large scale fraud that appears to have similar holes to that which caused my problem. It's very scary, especially since the information on the website dates back to 2002 and one wonders if the banks and credit card companies have essentially made any improvements since. Has anyone else had this problem with Air Canada? Are some vendors better or worse than others and is there some list or website that tracks this?

Update September 30 .... Well, haven't I been surprised at the further developments! It turns out the original error was committed by TD Travel who used my credit card by mistake to pay for another family's travel booking. The error was compounded and abetted by both Air Canada and Visa, neither of whom bothered to verify anything beyond the correct card number and expiry date. All that rigamarole we go through as individuals for web bookings to authenticate ourselves apparently doesn't apply to travel agencies. TD Travel say they are very concerned about the slip-up and are investigating their internal processes. They agreed to give me some compensation (in the form of more of their travel points) for all my trouble. The compensation has now been provided, though my Visa account has not yet been credited for the actual ticket reimbursement.

It also turns out that Visa will look into a charge that a customer like me officially reports as not being their own. During several initial contacts, neither customer service nor security at TD Visa
mentioned this facility. Meantime, despite explicit recognition that it was a case of error not fraud, TD Visa still blocked my card for a few days till I phoned them back to ask the block to be lifted.

All in all, none of Air Canada, TD Visa or TD Travel comes out looking very pretty in this incident. We'll see if TD Travel chooses to make a public statement on this blog since I told them I would be writing about the outcome and offered to print their comments, should they have any.

Update Oct. 2 - My Visa has finally been reimbursed so I am ''whole'' again. Whew!