August 5, 2014

By Margaret H. Johsnson

Double doubles, donuts and debt make for a nice breakfast, no?

CIBC and Tim Hortons have partnered up to offer the new CIBC Tim Hortons Double Double Visa Card. This fancy new credit card has some flashy features - it is both a Visa card to use anywhere Visa is accepted and a Tim Hortons card to redeem towards coffee, donuts and more. And the novel feature is that is has buttons on the card that you push to change between the two types of cards. But wait, there’s more! If the buttons haven’t sold you already, you may be persuaded to get this card for the rewards offer: earn 1% in Tim Cash on all Visa purchases, which is immediately loaded onto the Double Double Tim Card.

Now I’m sure thousands of Canadian Tim’s lovers will be rushing out to get this card, but I suggest a bit of caution before jumping into a new credit card. Ask yourself these questions before filling out the credit application:

1. Will you spend more on credit than usual, to earn more Tim Cash?

When you spend $100 on the Double Double Visa Card, you earn $1 in Tim Cash. That $1 will only get you a couple of Tim Bits, so you might be tempted to put even more of your daily purchases onto your credit card in order to boost your Tim Cash reward. In theory that is taking good advantage of rewards and saving you money in coffee, but in practise there is potential to overspend beyond your means, lose track of your money, and find yourself in debt. This is true for any credit card, and with rewards credit cards and especially ones with delicious donuts I think the risk is multiplied.

2. How does this card compare to other rewards cards?

The rewards for this credit card are limited to one place: Tim Hortons. I encourage you to look into credit cards with cash back rewards, or even grocery or gas rewards, because these can be more universally helpful to your budget by giving you more choice in how you want to use them, and by going towards the necessities rather than the luxuries. Groceries, gas, paying the electric bill, those are necessities that can be paid for with credit card rewards. Tim Hortons is a luxury for many, one we may need to avoid in times of financial difficulty. All I’m saying is that choice is a good thing, and this is something you should think about before diving into the Double Double card.

3. Will you keep a balance on the card? That is, will you be able to pay the bill every month?

If not, this may not be the credit card for you. Interest rates on purchases are 19.99% and 21.99% on cash advances, which are normal for credit card rates but certainly not good (low).

4. How will a new credit application affect your credit score?

Planning to take out a new car loan or mortgage soon? When you make an application for new credit, such as the Double Double Visa Card, your credit score will go down. That is part of the formula that the credit bureaus use to calculate credit scores: new credit applications are seen as a negative on your account. Normally, you will build your score back up over time by using the new credit and making timely payments. However if you are going to be getting a mortgage or car loan in the near future, your credit score may not have enough time to recover and you may not be eligible for the lower interest rates that you would have received before getting a new credit card. This goes for any credit card or any credit application, so don’t jump into something for its novel buttons and free coffee when it could cost you thousands of dollars in interest on your other credit accounts.

Well I hope this gives you a bit of perspective and precaution about the Double Double Card. Not that I don’t think it would be a great credit card for some people, I just fear that it could lead to double trouble for those with a bad credit sense and those who purchase for their tummy instead of their needs. Because of the flashy features and tasty treats, the Double Double Visa Card will be enticing to many, but remember these are the bait to attract people and their money for the benefit of CIBC and Tim Hortons.

Remember, if you are experiencing financial difficulties do not wait. Call Solutions Credit Counselling at 1(877)588-9491 or fill out our Debt Consolidation Questionnaire and get your Free Credit Counselling Advice today.

For more information visit Debt Canada - your Canadian credit education centre.

If you are a woman in debt, speak with Women and Money first. We specialize in helping women with their personal and business financeMoney management advice you can count on!

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