Aug 01

REVIEW CIBC Dividend Visa

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When it comes to choosing a credit card, the choice is often a difficult one.  There are so many options out there.  Here we take a look at the CIBC Dividend VISA card.   There are a couple of compelling reasons that make the CIBC Dividend VISA a good choice in my view.  Let’s take a look …

 

The picture above is not an active link.  Here is the active link to the CIBC website.

Before we start, I own two credit cards (well, actually three, but I don’t use my BMO Air Miles Mastercard anymore because I have lost my love for Air Miles).   I use the CIBC Dividend Visa and the CITI Enrich Mastercard (CIBC has since bought the CITI credit operations in Canada.  I’ll comment on that later in an upcoming post).   The CIBC Dividend VISA is one of the two cards that I carry with me.  Here’s why:

1) No Annual Fee – The CIBC Dividend Visa card has no annual fee.  I actually refuse to pay an annual fee for a credit card.  This is, in fact, the first feature I look for when considering any credit card.  I don’t really care if my credit card is platinum, gold, silver, graham wafer, or even lead (well, maybe not lead); I want it to add value.  A good starting point to adding value is no annual fee.  So far, so good.

2) Cash Back – I love a credit card that pays me cash based upon a percentage of my purchases.  The CIBC Dividend VISA pays you cash.  Forget Air Miles, Aeroplan Miles, or any other type of miles.  Go for cash.  You can use cash anywhere and at any time.  If you want to use your cash to go on a trip, use it to buy an air flight.  If you change your mind and you want to buy a new toaster, or a new pair of shoes, or if you just want to save it for a rainy day, or put it away for your child’s post-secondary education, go ahead and do it – the choice is completely yours with cash.

The only thing I don’t like about CIBC’s Dividend VISA and its cash back feature is its tiered spending policy.  This is why I have always preferred using my soon-to-be-taken-over-by-CIBC CITI Enrich Mastercard up to this point.

The tier system works like this:

  • Tier one – 0.25% rebate for net annual purchases up to $1,500
  • Tier two – 0.50% rebate for net annual purchases from $1,500.01 to $3,000
  • Tier three – 1% rebate for net annual purchases over $3,000

So basically, once you accumulate $3000 in spending over the course of the year, you are at the top 1% tier.

Here is a list of other features of the CIBC Dividend VISA from their website:

  • $100,000 Common Carrier Accident Insurance
  • AVIS car rental discounts up to 20% on at participating locations
  • Free personalized CIBC Convenience Cheques
  • Guaranteed hotel reservations
  • Cash advances of up to $1,000 a day
  • Emergency card replacement
  • Worldwide VISA acceptance when at over 24 million locations

I have never used any of these other features so I can’t really comment on them.  Please make a comment (see below) if you have had some experience with these feature.  I am only interested in no annual fee and the cash back features.

I never carry a credit card balance; I pay off my balance each and every month.  I should also add that I use my credit cards to buy everything (except for stuff I buy at Dollarama or if I am buying a stick of licorice).  In view of this, I am essentially giving myself an after-tax 1% pay raise (or a 1% after-tax discount on everything that I buy depending on how you choose to look at it) with no risks or costs attached.   I love getting something for nothing.

Caveat emptor – If you carry a credit card balance, no credit card is the right credit card for you (not even the CIBC Dividend VISA).  Instead, consolidate all of your outstanding credit card balances and apply them to a line of credit (which carries a much lower rate of interest) or something else that carries a lower rate of interest.  The current regular interest rate on outstanding balances with this card is currently 19.99%.  After consolidating your debt, cut up your credit cards (or at least freeze them in a bowl of water and keep them in your freezer so as to resist impulse buys).   The benefits are only real benefits if you do not carry a balance.

In summary, the CIBC Dividend VISA card is a good choice for someone looking to get something (money) for free as long as you do not carry a monthly balance.  The only thing that I do not like about this card (when comparing it the the CITI Mastercard) is that it has a three-tiered cash back system that effectively pays you less that one percent until you have spent $3000 over the course of the year.  Otherwise, it is a very good choice – four stars.

CHECK OUT MORE OF MY PRODUCT REVIEWS HERE!!

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froogalist

Frugal dad – focusing my money and energy towards happiness and the things that matter most since around 1985.

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1 comment

    • Jan on August 14, 2011 at 6:12 pm

    Hey,
    Interesting post, I like the way its written. I have bookmarked your blog and I’ll make sure to visit here often.
    Also, feel free to email me if you have “some” exclusive information on this topic.
    Regards,
    Linda

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