Spending

Is Black Friday Worth the Hassle?

November 28, 2010

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Perhaps, it’s just me but I just don’t understand the appeal that Black Friday seems to have for some Canadian shoppers. It totally makes sense for a Canadian on a visit to the US to get some Christmas shopping done but let’s list the steps involved for a Canadian resident driving across the border simply to score some Black Friday bargains:

1. Take Thursday or Friday or both days off.

2. Drive to the US border. Wait in line to clear US customs.

3. Spend money on gas, tolls (if any), lodging and meals.

4. Line up in the cold well before store opening to snag the best deals. Try and avoid any brawls that may break out.

5. Buy items on your list. Pay sales taxes (if applicable). If you are paying with a Canadian credit card, you’ll be charged a 2.5% fee on top of the applicable exchange rate.

6. Wait in line (again!) to pay taxes, duties (if applicable) at Canadian customs.

I hate shopping at Wal-Mart even on a regular weekend. For me, no TV is worth lining up for hours in the cold in front of a Wal-Mart.

Netflix Launches in Canada

September 22, 2010

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Netflix announced today that it is offering unlimited movies and TV streamed over the internet into the homes of Canadians for $7.99 per month. As a consumer who is tired of paying ever increasing cable bills, I watched the announcement with some interest. Though Netflix is offering the first month free, the selection of movies and TV shows on offer at present is rather limited. Here’s a quick rundown of movies and TV shows that came back with “not available”: Toy Story, Shrek, Finding Nemo, Ratatouille, Alice in Wonderland, Avatar, The Hurt Locker, CoralineChuck and Big Bang Theory.

Even if Netflix’s selection were more extensive, we are still limited by Bell’s bandwidth cap of 25GB. Netflix says each hour of a movie or TV show will use up 1GB of bandwidth for standard TV and 2GB for HD. At that rate, a monthly bandwidth allowance of 25GB doesn’t go very far. One option would be to switch to an ISP like TekSavvy as many consumers frustrated with bandwidth shaping and throttling of the big telcos and cable companies have already done.

Now if only there was a way to watch a hockey game or the NFL or the Stanley Cup finals or the Super Bowl, we could be saying adieu to those cable bills pretty soon.

One Reason to Obtain a US Dollar Credit Card

August 8, 2010

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Frequent travelers to the US or those who incur regular expenses in US dollars might want to sign up for an US Dollar credit card. It might work out cheaper to convert Canadian dollars into US dollars using this gambit than paying a 2.5% premium that credit cards typically charge for currency conversions. Reader Andrew sent in this note on why a US Dollar credit card makes sense.

I do a fair amount of traveling in the US, and therefore follow closely the mechanisms by which my credit card converts exchange from US dollars to Canadian dollars. This exchange is typically done by Visa at what they say is a a 2.5 percent premium on the prevailing exchange rate “at the time of posting”.

Now, I first became intrigued with exactly what time point Visa would use to make the exchange back in 2007, when the Canadian dollar approached $1.10 (US).

I had the good fortune to be traveling in the States at that time, using my card several times each day. Interestingly, when I returned home to my credit card statement, my quoted exchange never even got close to $1.10, even when accounting for the 2.5 percent premium on exchange.

As the currency exchange rate had been highly volatile at that time, it occurred to me that if Visa could select the time of conversion retrospectively, they could potentially squeeze an extra 1 to 2 percent out of the exchange business at my expense.

However, when I examined the Cardholder Agreement at that time, it stated that the conversion would be made at the prevailing exchange rate at the time of posting to the account. This obligation seemed to limit the ability of the bank to ‘choose’ a moment of exchange.

I recently reexamined the latest cardholder agreement, and lo and behold, the wording on foreign transactions has changed!

“Foreign Currency Transactions:
… we will convert the charges into Canadian dollars no later than the date we post the transaction to your Visa Account at our exchange rate which is 2.5% over a benchmark rate set by Visa International…”

I read this new description in the cardholder agreement, as allowing the bank the flexibility, as long as it is same day, to choose the time of conversion in order to maximize exchange profits. They can exchange all US$ transactions at the day low point for the CA$, and use the day high point for CA$ transactions on US cards.

For anyone sitting on the fence about getting a US$ billed credit card, this may be enough to convince them to go for it!