Canadian vs. American Credit Cards

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I hate how sometimes you can be so close to something yet so far! That’s the feeling I get because I live around an hour from the States and but I don’t have access to American credit cards. So while I was at BACon, I found that all the other American bloggers only had the faintest idea of what the Canadian market was like. Hopefully everyone from both Canada/the US will find this interesting.

1. Canadians residents/citizens who don’t have green cards generally cannot apply for American credit cards.

This should be pretty obvious because any online application is tied to a credit score which only an American with an SSN can have. I’ve read reports of using your Canadian SIN and starting with store cards, and then moving up the ladder. But in that case online applications (especially with time-limited offers for the very famous [or infamous?] 75k AMEX offer a week back) are going to be more difficult even if you somehow can get something tied to your SIN. I guess you could apply for credit cards by snail mail phone? 🙂

I’m fairly certain that Canadians who have a US address and have connections with Americans can get supplementary cards which I think would be really useful for AMEX MR that is essentially transferrable to anyone’s account for programs that AMEX Canada doesn’t partner with such as AF/KLM Flying Blue or SQ Krisflyer, or even taking advantage categories such as the Ink Bold/Plus 5x on office supply. Of course, you would need someone where there is mutual trust so that the supplementary cardholder does pay for his/her part of the charges. You’d also have to find someone who doesn’t know very much about transferrable miles to work out an agreement for distributing points. So most likely the Canadians that have good relationships with relatives in the States are in luck.

Independently, AMEX also has a transfer option called global transfer but you would need details of employment. That’s actually very vague as I don’t know whether you actually need proof of employment in the US (as it’s a bit vague). In any case, global transfer would apply definitely to Canadians that have to at least be in the US significantly. I think it’s definitely a different case with transferring to different countries especially because most of Canada’s population is within an hour’s flight of the US, so it’s not like you can’t shuttle between Canada and the US where it would be much more expensive if you transferred to either Europe or Asia.

Business credit cards are a little bit different because I’ve heard conflicting reports on both sides. I’ve never verified but frankly I would think that if you’ve never applied for a business credit card before, the issuers would want to verify that you’re able to handle any financial spending and again as a Canadian you don’t have a credit record in the US. You’re not able to port your personal record over to the US (although with AMEX that might be a little different if you already have Canadian personal/business cards) so what friends who are Canadians and have legitimate businesses in the US have told me that it is quite difficult to get business credit cards even if you have an Federal Tax ID (EIN). My friends who are Canadians and do business in the US say it is difficult to get a card because they have a lack of personal credit history in the USA (and this is extremely hard to build without an SSN). This gets even more confusing when you can apply for secured business credit cards, but it’s definitely something I will investigate in the future.

I’m not even going to talk about Americans getting Canadian credit cards. You have it easy enough so go find ways to do manufactured spend if you think the minimum spend requirements are too high for your cards!

2. Offers for Canadian cards can only increase while offers for American cards will likely remain stable.

Mommy Points has a great post on what and how the credit card issuers are thinking about their products. Essentially, in the US, the current 50k offers are here to stay, the issuers look what customers want to gain a competitive advantage (Chase comes to mind with annual renewal bennies), and customers are targeted for offers.

In Canada there’s a lot less targeting. For example we don’t have AMEX Twitter Sync, we don’t often have targeted offers for minimum spend for bonus points or bonus points for specific category spend. I’m actually not sure of the reason why and that is really something I would like to know. I’m pretty sure it’s not that they don’t have the resource nor the technology, but it’s something that could be introduced in the future. So again we’re like 7 years behind the US.

Signup offers in the US are nearly always better than in Canada. Surprisingly the public offers are not actually not that far apart but where our offers will max out at 50k, US offers are 2-3x better than in Canada. So when Chase had the 100k BA signup in the USA, RBC had a 50k Avios offer. Current Chase USA offer is 50k, current RBC Canadian offer is 15k. This is almost exactly the same with AMEX. There are targeted 75k/50k offers for AMEX USA Biz Gold, and Canada gets a 25k public offer for the same Amex Gold Biz. The only thing that is good about Canadian cards is that your minimum spends max out at 5k over three months, but I don’t think I would have a problem meeting US minimum spend amounts with my family. I guess it would be difficult for some readers so if you are having problems meeting even 5k within 3 months, send me an email and it should be pretty easy to solve.

The other thing that annoys me is the lack of cards in the market. We do not have a way to accrue United miles at a reasonable rate (the best is 0.625 points/$1 with SPG AMEX), we don’t have open applications for Diners Club, we don’t have a co-branded Hyatt, United, Club Carlson, American, or Hilton card, we don’t have most of the AMEX airline transfer partners, and we don’t have Chase Ultimate Rewards. Okay, that was a long list. I feel better now :). I actually talked to the Chase rep at BACon and he said that UR isn’t going to come into Canada for a bit simply because Chase doesn’t have a retail presence. I mean, they have been improving their line of co-branded cards, which means their strategy of partnering with well-established retail names such as Amazon, Sears, and Marriott is working, so one can only hope that Hyatt comes in.

What’s also interesting is that the market is also improving. I say it’s because of the Aeroplan devaluation which were around the same time when Aeroplan and CIBC (the credit card partner) started losing its credit card of the year awards and somehow the other banks improved their offers (i.e AMEX SPG started offering 20k signup bonus, BA Visa go upgraded to a Visa Infinite and had time-limited 50k offers, the earning for the Capital One Delta Skymiles card went up to 2miles/$ for everyday spending, and the Marriott visa went up to 30k and targeted 50k offers). Of course this could be coincidental but I would like to think otherwise.

It could also be deregulation of the credit card rules and privacy laws and all that (which I’ll say I’m not an expert on), but in any case the Canadian offers are consistently better than before which is pretty good. I’ll take whatever I can get!

This is why my valuations of miles are a lot different, because then cashback cards become much more valuable. If I can consistently get 2% back, and I can get lifemiles for 1.3 cents, why don’t I just use cash from my 2% credit card and buy 1.4 lifemiles per dollar spent? I don’t do this myself for my own reasons, and everyone else will have different opinions on what redemptions they want, but it’s definitely an interesting scenario to consider.

3. The Canadian credit market differs significantly from the US market.

Canada is definitely not represented as well by cobranded cards as in the US. The only co-branded cards we have are Aeroplan (AC), Skypesosmiles (DL), Asia Miles (CX), Alaska Miles (AS), and Avios (BA). We also have several Air Miles branded cards which is useless doesn’t allow premium class redemptions. Frankly don’t have anything else which is pathetic but I guess realistic given that we have around ~12% of the population of the US.

We don’t have Credit Karma or Credit Sesame so there’s no online monitoring or free access to credit score. I don’t actually think there is a free way to get your credit score as the paper report you get once a year by sending a snail mail request doesn’t actually list your number but just all the marks on your credit report. Thus I also think the “art” of credit card churning isn’t as strict as in Canada, but of course there are far fewer decent cards in Canada.

I’m pretty sure the derivation of your credit score with the five components (credit history length, types of credit, utilization ratio, payment history, and number of inquires) is similar as with Canada but I’m not sure whether the percentage allotments are different. In any case online applications are generally very lenient as long as have a good credit history and meet minimum income requirements.

Of course all of this is from anecdotal experience when I prepare churns for my parents but there’s no art of calling the reconsideration line (so I don’t have to impersonate them :)), no moving credit lines around and no maximum limits of cards (as far as I know). You can also get bonuses more than twice, as long as there is a gap of 6-12 months between each application. So basically we’re a few years behind the US when there was actually 15,000 bonuses and being able to cancel/reapply easily to get the bonuses multiple times.

Anecdotally I would think that credit card fraud is much less prevalent in Canada. As far as my parents have had credit cards, I’ve never seen (or maybe I was too young to remember) any fraud alerts or any credit card fraud on my parent’s statements. I have no numbers on this, and maybe it’s because we have chip and pin (so you don’t even have to hand your card over), or maybe Canadians are nicer.

I would still say American credit cards are the big prize. Hopefully I’ll find some way to get them in the future. 🙂

 

Comments

  1. AMEN to all of this. As a VERY regualr readeer of the many blogs covering points, sign-ups, special redemptions, etc. BUT sadly as a Canuck, I am quite disappointed in the large discrepancy between the two markets Credit Card offerings. That said, I/we do collect Air Miles, Aeroplan, and Qantas Miles. We use our primary CC, an Air Miles World Gold MasterCard for as much of our daily spending as possible. AM’s accumulate fairly quickly as a result and we often redeem them for hotel stays, which may, likely may NOT be the most efficient method. It IS strange that so many Canadians carry and heavily use credit cards, we are currently deeper in personal debt than some nations, and yet the CC issuers do not seem to feel the need to go after our money. Strange, ain’t it?

      • I/we simply joined the QF f/f club. AA was not really an option since when (mostly) travel using Air Canuck. The “plan” was to try to take advantage of a multi-segment trip to Oz, NZ, and the South Pacific last year. Has NOT worked out the way I’d hoped. I SHOULD have booked using our BA Exec Club numbers, which would have also accumulated the (relatively) same number of points/miles. And then, would have been MUCH easier to redeem. I skunked myself, but did learn a valuable lesson.

          • ‘Wish I’d known that/you before I/we took the trip. HOWEVER, it was the proverbial “trip of a lifetime”, Qantas was better than okay, and shold a loto ticket pay off, we’ll go back.

  2. Yes, I literally cry when I see all the RICH offers The US gets 🙁

    I think CHASE offers the most promising hope for better cards as they stepped it up with Marriott (I got 50K sign-up, 1 free night at cat 4 w/ 1 free night cat 5 there-after w/ no annual fee for 1st. year plus the card comes with no foreign exchange fees).

    For now, I try and use my SPG AMEX as my primary card since I can always transfer them into miles and when I do I usually wait for transfer bonuses on top of the regular 5K for every 20K.

    • Yep, the chase targeted 50k was nice except I don’t value Marriott points very highly especially with the devaluation.
      Amex SPG is a very good card for everyday spend.

      • I agree. However I wanted to get in on the 50K plus first year fee waived and free night. Don’t know if I will keep the card beyond the first year. I should also mention I only redeem Marriott travel pkgs. especially with miles transfer bonuses. I got a 60K US Miles bonus last month 😉

  3. Are there Canadian regulations which are creating this situation? Or is the problem on the US side? As far as the card issuers are concerned it would seem to be more efficient and cost-effective to combine the two populations for card issuing purposes since they are geographically identical.

    • Too many separate privacy and jurisdiction issues to combine USA and Canadian credit card market. Canadian banks are just much more conservative with their numbers so I would think there’s no over the top offers to increase signups unlike in the US.

  4. Canada should join the US and form the biggest alliance humanity has ever witnessed. Hey Europe did it, so can we.

    Yeah we ( Americans) are kind of crazy, some like their guns ( hear Alberta is sort of the same), and we have bible belts and porn belts. But we share so much with our close cousins, speak the same language ( except for Quebec), share common borders and economic interest.

    No I am not saying Canada stops being Canada, I am saying Canada and US should be joined like EU countries, with right to work, commerce, residency etc ( Heck, What do Sweden and Spain have in common???)

    I know I am going to get lots of flame…but makes all the economic sense in the world

    • Vested interests in both countries (political parties, States/provinces, small businesses, favored industries, etc.) have and will continue to oppose any kind of alliance (except-perhaps-NAFTA).

  5. Love this article, answers some questions and very informative. Feeling same frustration with our cc issuers, but like you say,it’s probably only a matter of time before we get some sweet sign up bonuses.

  6. To be effective to the issuer, a cobranded FF cc must have enough members to justify the costs of marketing and maintenance. After CP folded into AC, TD issued an AA card but this was phased out because there just were not enough AA members in Canada…and most of those who took the card paid it off in full each month, so it made little sense to keep it going. How many AA or UA elites are there in Canada who would take such cards? I doubt if there are more than 10K total between the two programs, about the number of AC SEs. (Yes most of us know AE is the worst FF program going but more people have CIBC AE cards — followed by Air Miles ccs — and its considered the only game in town by the masses.

    I’d love to see a UA/MP or AA card, and there have been rumours of a Chase UA/MP card, but not holding my breath over it. At the moment I will just keep earning AA miles with my Diners/MC card (and wait for 25% bonus conversions) and do the same with my Amex MR points to my BA account (not bad if you don’t book BA flights, of course). I’ve left AC/AE but do collect Air Miles and use a BMO AM cc. Actually AM is good for short haul flights, and if booked on AA or UA, earn mileage and elite tier benefits (including UDUs) so I don’t write that program off.

    • I don’t think there would be a UA MP card because there has to be some agreement where AP has a stranglehold over star alliance in Canada. If there’s a good enough push, I’m fairly sure that UA MP could make a breakthrough if they promote it correctly, because UA is just a million times better than AP. I wouldn’t hold out for an AA co-branded card because there simply aren’t the numbers as you said. I’m perfectly happy with RBC Avion to AA with transfer bonuses although I would like some bigger signup bonuses. Also I would like Diners Club to open back up signups and come in with a 25k/30k offer which would be awesome, and then I can get Korean Air first class without eating a lot of my SPG balance.

      I’m surprised you still collect airmiles as I don’t find any value in the program, but that’s because I don’t do any short-haul domestic flights that aren’t covered by avios or even the 15k short-haul award with the AMEX AeroPlat companion ticket. Definitely, though, it’s really unfortunate that the top two programs in Canada are extremely crappy in my view (and is only going to get worse with the AA-US merger).

  7. Thanks for this post, Jeff. I just wanted to note that there is an American credit card that Canadians can get: the US HSBC Premier World Mastercard. You need to be a Canadian Premier member to qualify (100k in assets with HSBC). The rewards on the card aren’t as good as the others mentioned in this post, but it is a great card for travelling as there are no forex fees. We have it along with our US Premier chequing account for instantaneous cross-border money transfers.

    • Thanks, good to know. I use the Chase Marriott Visa as that has no forex. The only reason I would want US credit cards are for the signup bonuses. 🙂 what transfer partners does the HSBC card have?

  8. I agree. I wish my HSBC credit history in the US would let me qualify for other American cards (and their bonuses), but without a green card/SSN I don’t believe that’s possible.

    You can redeem HSBC World MC points for Asia Miles, KrisFlyer Miles and Avios (1:1 I believe). You can also use your points towards travel booked through their travel centre. You don’t accrue points at the same rate as other cards, but it’s not a bad program, especially if you need a US card. Plus it’s free (if you qualify for Premier) with no forex fees.

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