Give Me Back My Five Bucks

Time to find a new credit card

Recently at an event in Toronto, I found out that my credit card (Capital One Aspire Travel World Mastercard) is being discontinued. I’m pretty heartbroken because it was the best travel rewards card available to Canadians, and I’ve only had it for 2 years. :| But it has served me well in that time, getting me free hotel stays and free flights to Toronto and Hawaii.

So I’m on the hunt for another rewards card. The only problem is, based on my spending, the best ones for me are American Express. And while I’m not opposed to an American Express card (even though I’ve had some problems with them in the past), so many places don’t take American Express (especially when traveling), so I’d have to get a secondary credit card as a back-up.

Here are my results, using the RateHub.ca credit card tool:

ratehub

I’m leaning towards getting the ScotiaBank Gold American Express Card, and then getting a no-fee Mastercard or Visa as a back-up.

For those that are wondering, I put every purchase I can on my credit cards, but never carry a balance. I like using credit cards because I can earn points for my spending, and track every purchase I make. But they’re only valuable tools if you can pay off the balance every month. Points don’t mean anything if you’re paying more in interest every month than what the rewards are worth!

For those who also have the Capital One Aspire Travel World Mastercard, have you come up with a replacement card yet?

P.S. if you haven’t used the RateHub credit card tool, it’s really good. There’s so much information there, that it makes comparing cards really easy. :)

How to pay back the Home Buyers’ Plan (HBP)

Most of you know that when I bought my townhouse almost 4 years ago, I utilized the First Time Home Buyer’s Plan (HBP) to help with my down payment. For those unfamiliar with the HBP, it allows you to use up to $25,000 of your RRSPs towards the purchase of your first home – tax free!

This was a strategy I always knew I was going to use, so anything that was earmarked for my down payment, I threw into my RRSPs. Then, I would reinvest my tax refund back into my RRSPs for an even bigger gain. I also saved about $20,000 outside of my RRSPs, since the maximum you can take out is $25,000.

Related: How I saved for my down payment

You have up to 15 years to pay back the amount you’ve withdrawn, so for each year of your repayment period, you have to repay 1/15 of the total amount. So for example, I took out $25,000. My repayment every year is $1,666.67 ($25,000 / 15). Each year, you’ll get a Home Buyers’ Plan Statement of Account with your notice of assessment, which will include all the information you need – total HBP withdrawals, the amount you’ve repaid to date, your balance for the HBP, and the amount you have contributed to your RRSPs and designate as a repayment for the following years.

How to pay the HBP back

I use TurboTax every year to do my taxes, and it’s really straight-forward in how to pay it back.

hbp1

Just enter in all of your information, and TurboTax will do the rest for you. Honestly, it really took all the stress away from paying back the HBP, because at first, it seemed really confusing. Most online tax software is set up to handle HBP repayments in a user-friendly way. :)

hbp2

When you have to start repaying

Your first repayment starts the second year following the year you made the withdrawal.

You’re allowed to start making repayments earlier, but your years of repayment (15) will remain the same. Any repayments you make before your first repayment is required will reduce the amount you have to pay for the first year. That is, unless your early repayments are more than the minimum required payments for the first year, then the difference will reduce your HBP balance (and the remaining repayment amounts) over the 15 year repayment period.

Paying more or less than the minimum payment

If you want to pay more than the 1/15 required in any given year, you’ll still have to make your payments the next year, it’s just that the HBP in later years will be reduced.

However, if you want to pay LESS than the minimum required payment, the government will treat the amount you withdrew from your RRSP as income for that year. You’ll be taxed on it, and it won’t be pretty.

Important! You can’t withdraw any money from your RRSP that was contributed within the last 90 days. Consider the timing if you plan on utilizing the HBP for your first home.

What I love about the Home Buyers’ Plan is that you can use it for whatever you want. I used the entire amount for the down payment on my home, but you could use it for renovations, closing costs, or buying essentials for your home. It’s flexible, and that’s what makes it a good tool for first time home buyers.

Did you use, or are you considering using, the Home Buyers’ Plan for your first home?

Note: this post is sponsored by TurboTax Canada, but was written and edited by me.

2015 Canadian Personal Finance Conference

I’m currently in Toronto scouting out venues for #CPFC15 (yes, it’s actually happening!!!). For those that don’t know, CPFC stands for the Canadian Personal Finance Conference, and it’s something that I co-founded with my pal Preet Banerjee back in 2011. We wanted to create an event for personal finance bloggers to get together, learn, and share ideas, and the 2012 and 2013 conferences both sold out extremely fast. Past presenters have included Rob Carrick, Dan Bortolotti, Ellen Roseman, Bruce Sellery, and Kerry Taylor. It’s the only conference of its kind in Canada, and I’m super proud to be part of it.

Preet stepped away from the event after 2013, and after a year hiatus, we are back on track and ready to make 2015 the best PF conference ever. :)

If you’ve attended before, or are interested in learning more, I’d love to get your opinion on a few ideas I have for the conference. It’d be really helpful if you could take a few minutes and fill out this survey for me!

To stay up-to-date on the latest #CPFC15 news, you can follow the hashtag on Twitter, and like our Facebook page.

Any questions? Leave a comment, I’d be happy to answer them all.

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