Mastering the Search for Your Optimal Credit Card - A Unique Solution

There are many credit cards out there, all with their own unique requirements, rewards and benefits.

The differences may not be significant at first but in fact choosing the right credit card over a random one might save you hundreds of dollars per year.

I want you to read this short story about my mistake so that you don't fall into the same trap and have regrets years down the line.

My Story

I immigrated to Canada 4 years ago to continue my studies as a Data Scientist. While being a student, I also had to figure out my finances like signing up for credit cards or researching different loan options as a student. Like most other students, I opted for student credit cards at one of the big banks as that was the most recommended. I did not know any better.

After graduating in early 2021 I got my full time job as a Data Scientist. As I started my career and was trying to setup my finances, I simply upgraded from my student cards to more generic cash back cards as I was no longer a student. But I didn't realize what I was missing out...

Almost 2 years had passed and I was getting little to no cash back. I felt like something needed to change. I decided to go to CIBC and talk to an advisor for getting a new credit card. After being shown a few options, I tried asking about the differences in the cards and got very generic answers and was told they are pretty much the same. Later on I found out that the advisor were either intentionally or unintentionally wrong.

Then I decided to take the online route. After spending days searching the internet, using different online tools (e.g. creditcardgenius), reading finance articles and blogs, I felt they all had the same underlying problem:

Everyone is presented with the same guidance and experience, regardless of having vastly different financial resources, goals and spending habits.

So I put my Data Science skills to use and created a calculator to accurately calculate which credit card would be the best card for me. I was shocked to find out that I had missed out on almost $1000 each year since I moved to Canada because I was using the wrong credit card! I shared this tool with others and got a lot of interest from them as it turns out they were also using the wrong credit cards for them.

From that moment onward, I decided to build a more structured procedure that everyone could follow in order to find the best credit card for them in under 10 minutes so that they won't miss out on hundreds of dollars in rewards every year. Do read till the end to find out what we have built, trying to disrupt the Credit Card Search industry!

1. Your Credit Score and personal and house hold income

Before doing anything else you need to find out about your credit score and household income numbers. That's because some credit cards have a minimum credit score or income requirement and you need to know which cards you are eligible to apply for.

Credit Score

You can easily figure out estimates of your credit score using free services like Borrowell or Credit Karma. I've personally used creditKarma and found it quite straightforward.

The more official way of doing it is through the two main credit bureaus: Equifax and TransUnion. These bureaus collect and analyze your credit-related information to calculate your credit score, which typically ranges from 300 to 900. A higher score indicates better creditworthiness.

Some of the mobile banking apps are also connected to these services and can give you your credit score in the app. Feel free to use them to get your credit score as well.

Personal and Household Income

Personal income is the amount of salary you are receiving each year. Household income is determined as your income plus the income of the rest of your family or partner.

If you are making anything extra on the side like tips, bonuses, interest, dividends, rental income or money from any other sources you can add it to your total income as well.

2. Calculating how much on average you spend on each spending category

Different Credit Cards will give you rewards based on what you spend your money on. Some cards give you more points for dining out, some give more points for groceries and many other cards give points for other things. So you need to accurately calculate how much you are spending on each because even small errors could add up quickly and be worth hundreds of dollars in rewards lost per year.

So there is a quick way to do this and a slow way.

The not so fast method

First you need to estimate your average monthly spending for these spending categories from your old bank statements.

Full list:

• Restaurants, Fast food and Coffee shop

• Grocery

• Pharmacy

• Gas

• Public Transportation

• Ride Share (Like Uber, Taxi, etc.)

• Home Improvement

• Furnishings

• Parking

• Entertainment

• Travel

• Subscriptions

You could create a page in Google Sheets to do these calculations which would likely take over an hour to complete.

That was also my very first approach to it. It took a few hours to create a proper spreadsheet. But this is a very tiring process and you can make a lot of errors in the process. That's why we have the fast way that does this under 10 minutes.

Speeding up the process

I created Finly to automatically take care of this step for you! It uses an industry standard financial data provider called MX to securely connect to your bank. MX provides finance solutions and has contracts with Canadian banks, used by other big companies in the industry like thepointsguy.com to securely connect to your bank. Then using AI, Finly will learn your spending habits and can automatically categorize your transactions for you in a matter of seconds. It will even do the step #3 for you that I'll mention below.

So the whole process of you downloading the app and getting your recommendation will take you less than 10 minutes. A pretty good deal for something that's free, don't you agree?

So whether you plan to use the app or do the calculations manually, let's head to the final step of finding your optimal credit card.

3. Using a calculator and going through the cards

The manual way of calculating the rewards can be quite painful. You can go to each credit card's website that you're interested in, learn about their reward rules, read their terms and conditions, and then use your spread sheet from the previous step to apply the rules to your spending estimates per month.

Imagine the simple scenario where you spend $200 on gas, $600 in dining out and $300 in groceries per month. You're also interested in getting the Simplii Financial Visa Card which provides you with 4% cash back on dining, 1.5% for your gas and groceries and 0.5% on all others.

What you might miss is that the 4% cash back of dining out only applies to the first $5000 worth of purchases in the year, meaning once you pass that spending amount on restaurants before the year is over, your 4% cash back drops down to 0.5%. This is written in the terms and conditions of this credit card in very small font. Most people would not bother to look.

Now considering all that, you would need to do some math to figure out the cash back estimates, assuming you took into account the yearly limits on cash back earned for each category.

Cash back on dining: $211

Cash back on groceries/gas: $90

Total cash back: $301

That was a lot of work just to figure out a reward estimate for one single credit card, right?

Alternatively, you could use online calculators from websites like creditcardgenius but the results you end up with are often not accurate. I tried a simple scenario where I spend $2000 per month on dining and nothing else and somehow got a reward estimate of -$275!

See below:

As a data scientist, this was unacceptable, so I spent hundreds of hours to build an accurate tool named Finly that finds you the optimal credit card with proper estimates based on your real spending habits.

The more accurate solution

As previously mentioned, Finly can also automate this step. Finly can analyze your real spending habits and apply all the different credit card reward rules to them to figure out exactly which credit cards give you the highest rewards before you even apply for them.

Looking for the best credit card out of all the credit cards in Canada. Let Finly take care of it for you. Here's mine:

Looking for an RBC credit card? Let Finly show you how much you could earn:

Looking for American Express credit cards? Let Finly take care of it:

I hope this mobile app can help you find the best credit card for you with the highest rewards before you decide to apply for it.