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Canadian Tire Bank is at the top of the chart?
August 14, 2020
4:23 pm
davidgeorge
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What a surprise. Canadian Tire Bank is on top of HISA chart with 1.8% interest rate.
ct.JPG

August 14, 2020
5:52 pm
Doug
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davidgeorge said
What a surprise. Canadian Tire Bank is on top of HISA chart with 1.8% interest rate.
ct.JPG  

Yeah, it won't last. When it, and MAXA Financial, drops, it'll drop hard (by at least 30 bps, by my own logical supposition and reasonable speculation). It, MAXA Financial, and Bridgewater Bank tend to be laggards, or trailing indicators, in the HISA rate race chase. 😉

Cheers,
Doug

August 14, 2020
6:46 pm
Loonie
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Didn't I read somewhere recently that Cdn Tire Corp had a drop in profits recently? Does that affect anything?

August 14, 2020
7:22 pm
GICinvestor
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I just read a few days ago that they could be soon extinct.

August 14, 2020
7:55 pm
smayer97
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Well that's a tall tale...given the response from CEO Hicks. That said, keep in mind that technically, the retail chain is a separate company than the financial services.

August 14, 2020
9:57 pm
Loonie
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Cdn Tire has recently resumed sending flyers to my house every week. No other company has joined them - yet.

August 14, 2020
10:44 pm
smayer97
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BTW, they have a promo for 2% until end of September...it is not long but it is 0.2% higher than their base.

Need to have a CT credit card to qualify and not be in Quebec.

https://www.ctfs.com/content/ctfs/en/retailbanking/hisa_vip_program_customers.html

August 15, 2020
8:41 am
Doug
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smayer97 said
Well that's a tall tale...given the response from CEO Hicks. That said, keep in mind that technically, the retail chain is a separate company than the financial services.  

Yeah, I don't think Canadian Tire will go extinct, but they could very see further cannibalization of their business by e-commerce retailers and thereby consumers pulling back on discretionary purchases. One could argue the financial services business is potentially more vulnerable in that consumers may still make purchases at Canadian Tire, but finance them a lot less. This, in turn, leads to lower financing requirements, and thus lower (for very much the long term) GIC and HISA rates going forward. They could also decide to allow Scotiabank to buy the remaining 51% stake in the business (by essentially taking the cash and running through full monetization of their financial services business), which Scotia likely would wind up or merge Canadian Tire Bank into either of (a) ADS Canadian Bank or (b) The Bank of Nova Scotia. Either way, this bank is headed back to the bottom in terms of HISA and GIC rates. sf-cool

Cheers,
Doug

August 15, 2020
3:18 pm
Loonie
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If I had a Cdn Tire CC, which I don't, I would be using up my accumulated points in a timely way. They are useless for anything else except merchandise in the Cdn Tire chains. You can't even buy their gas with them.

If things get bad enough, they could get swallowed by Lowe's or Home Depot. Look what happened to Rona, Aikenhead's. . . (Canadian companies).

August 16, 2020
7:36 am
Doug
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Loonie said
If I had a Cdn Tire CC, which I don't, I would be using up my accumulated points in a timely way. They are useless for anything else except merchandise in the Cdn Tire chains. You can't even buy their gas with them.

If things get bad enough, they could get swallowed by Lowe's or Home Depot. Look what happened to Rona, Aikenhead's. . . (Canadian companies).  

Loonie, all good points (no pun intended, honestly!), as usual. I'm not sure Lowe's is in a position to take on an acquisition of Canadian Tire, but wouldn't rule out Home Depot taking a run at them. I actually kind worry that Canadian Tire might try and bulk up by expanding into home furnishings and buying Leon's Furniture Ltd. That's a great Canadian company, generally well run, and focuses on a specific niche. While it'd make a larger Canadian company, I worry that the Leon's/The Brick corporate culture would be lost.

Another possibility: Amazon.com, Inc., may decide to eventually buy Canadian Tire Corporation, Ltd., as a way to expand their local e-commerce pick-up locations. They'd really improve CTC's e-commerce platform, as much as CTC has supposedly already improved it. And, there's potential asset sales they could do (i.e., Helly Hansen, which doesn't seem to be working out for CTC and seems to be more of a vanity acquisition by management).

Cheers,
Doug

Disclosure: I am a unitholder in CT REIT, which is CTC's largest landlord and which CTC holds a controlling stake in.

August 16, 2020
8:33 am
Bud
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I saw line ups at CT locations last few months I guess meaning less customers inside.

August 16, 2020
12:06 pm
savemoresaveoften
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Loonie said
You can't even buy their gas with them.

If things get bad enough, they could get swallowed by Lowe's or Home Depot. Look what happened to Rona, Aikenhead's. . . (Canadian companies).  

if they are dumb enuf to let someone redeem their CT money for gas, then they would have been out of biz long time ago.

Even if things get bad, they wont get swallowed, or need to be swallowed.

People worry about their CC biz but even that is not bad enuf to "bring them down" if custie credit goes down the drain.

August 16, 2020
1:08 pm
Loonie
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What's wrong with redeeming for gas?
You can redeem AirMiles at Shell for gas.

August 16, 2020
5:45 pm
savemoresaveoften
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Loonie said
What's wrong with redeeming for gas?
You can redeem AirMiles at Shell for gas.  

The margin on gas is way lower than merchandise that you earn the CT money from.

Look at the earn rate on AirMiles vs earn rate for CT money. CT money much easier to earn. At Shell, your normal earn rate is 1 AM per $20 I think, look at how many cars u need to fill before u earn even 95miles to redeem $10. Even at 10X promotion date, earn rate is still lower I believe.

August 16, 2020
9:00 pm
Loonie
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It's the redemption rate that counts. They could adjust the redemption rate for gas if they wanted to.

We get the vast majority of our AirMiles from special offers like MegaMiles etc., so our earn rate is much higher than you suggest. It has paid for months of gas annually.

CTB could do it if they wanted to, but they'd rather get people into the store, where they will likely spend more money than what they redeem.They could also improve their CC by partnering with others and offering more redemption possibilities, or at least providing cashback.

August 16, 2020
10:53 pm
smayer97
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As Loonie said, Air Miles earn rate can be VERY high if you are smart, like getting them during promos... During MegaMiles, earn rate can easily be 300%, no, not a math error; you can actually earn MORE than you spend, e.g. spend $30 and earn 1000 miles (= over $105 worth). And many other promos can easily earn 10%; spend $500, earn 500 miles (= over $52).

Though CT could allow redeeming rewards for gas, they already do give 5$/L or more if you use their credit card (which at current gas prices works out to over 5%; even at last year's prices, it is still at least 4%). And the goal is to get you into their store to use them so they "earn back" the rewards by your and my spending there.

Do remember that there is no free lunch... all these programs are paid for by you and me (and subsidized by every one else not using these programs) because they bake the cost into the price of their goods...

Easy to see... just compare pricing from places with no reward programs vs those that do...they are higher...e.g. gas stations, merchandise retailers, etc.

So if you want to benefit CT rebates on gas, use their CC.

August 17, 2020
5:05 am
PMcNamara16
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smayer97 said
BTW, they have a promo for 2% until end of September...it is not long but it is 0.2% higher than their base.

Need to have a CT credit card to qualify and not be in Quebec.

https://www.ctfs.com/content/ctfs/en/retailbanking/hisa_vip_program_customers.html  

The terms and conditions state no end date. You just need to sign up by September 30 to be eligible.

August 17, 2020
10:56 am
savemoresaveoften
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smayer97 said
During MegaMiles, earn rate can easily be 300%, no, not a math error; you can actually earn MORE than you spend, e.g. spend $30 and earn 1000 miles (= over $105 worth). And many other promos can easily earn 10%; spend $500, earn 500 miles (= over $52).
 

I have done all the megamiles (and quite safe to say and optimized it in every way possible) last 2 years but prob skip this year cuz it just sucks for what they offer in Ontario. Love to hear how u spend $30 and earn 1000 miles. Look at the megamiles and enlighten me how you can get the earn rate u described (I have already done all the freebies like signed up for autoconvert HBC, etc etc, yes done all those previous years).

Megamiles only happens twice a year, while CT earn are 365 days a week, so that is really comparing apples to oranges.

August 17, 2020
2:30 pm
Loonie
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I'm not going to take the time to itemize previous gains on Megamiles etc, but smayer is definitely correct. While I agree that the current offering is not very good, we have had several years with excellent returns. Typically, we spend less than $50 on things-we-would-not-otherwise-buy, and got a lot more back in AirMiles.

I could never understand how they could afford to do this, and it looks like they have cut back now, but that doesn't mean that CT couldn't do better.

As smayer said, and you must surely know, there are lots of other good AirMiles deals during the year. A week or two ago we had one where all you had to do was buy something at Sobey's, of any value, and you got bonus AirMiles, I think it was 50, which will buy me $5 in gas or groceries.

You're welcome to your 365day CC, but there are tons of those out there and I choose the ones that give cashback and don't require me to shop at their store. I rarely shop at CT anyway, maybe twice a year, and don't spend much when I do go.

The only reason this issue came to my attention is because my mother has a CT card with about $500 points credit that she can't use now that she's living in a retirement home, and there is nothing we can do with them. I anticipated this problem a few years ago but couldn't convince her to switch to another card because she liked seeing those fake dollars pile up.

August 17, 2020
5:59 pm
smayer97
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@savemoresaveoften Like Loonie said, Air Miles promos often involve little spending extra above what I would normally spend. For this Megamiles promo, it looks like my combo to get the 1000 miles will be: Shell, LCBO, Rona, Foodland, and using my Air Miles BMO card (which I already have) until I reach the $500 spend over the next 4 weeks...already almost halfway there (which will earn an additional 500 Air Miles)...easy peasy.

ALL of these are places we would normally shop, except Foodland...but that is close enough that it may be worth the trip, since in the end it would mean that I would spend $0 dollars over and above what I normally do at these places but get almost $160 back in Air Miles for doing it. So in this case, my return is infinite 😀

Does not always work out that way... one of the recent megamiles I could not pull this off but in MOST of them it has been this way.

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