General Goals 1) to be debt free in 3.5 years 2) save lots of money

Wednesday, January 19, 2011

Why I went Prepaid with Bank of Montréal

I have mentioned before that I am looking to take a trip to Cuba. The purpose of this trip is two fold 1) to attend an academic conference 2) to complete the residential portion of my Duke of Ed award. Thus completing another aspect of my Duke of Ed Award requirements. 

I want this trip to be the first one I will completely pay for in cash. However I came a cross a snag in the plans, the company I want to book with do not do debt… sigh. So I have been looking around for other options on how to pay for this trip.  I have been kicking around a couple of options

1)      Put it on my credit card. I currently carry a balance on my card, so I would use the money to pay off the balance and then rack it up with the trip. This is an option that several people have suggested to me (friends and family). I think this is a bit of a counter productive option and would not given me any satisfaction. Swapping one debt for another does not make it any better them having travel debt in the first place.
2)      Sign up for a new credit card. Once again the purpose of paying in cash is not to acquire more debt. Second why would I want to increase my debt to income ratio? O.o?? And despite what people tell you having more credit cards does not give you more benefits (see my post on Plastic Crazy).
3)      Gift Cards. Not an option with this travel agency.
4)      Pre-paid Credit Cards. The befits of a credit card including Purchase Security and Extended Warranty with out any of the downsides like interest rates (depending on the provider).

I chose option number 4. After making this decision I then had to choose the pre-paid card that worked best for me. In Canada there are two different banks that I know about that offer Pre-paid credit cards: Bank of Montréal (BMO) and The Royal Bank of Canada (RBC).

I decided to make a chart to compare the two bank pre-paid credit cards

Bank/card type
Interest rate
What kind of card is it?
$9.95 purchase fee (valid for 3 years),
The card is prepaid and reloadable – your limit is the amount you’ve loaded on the card. Load your card as a bill payment from any bank account at most financial institutions. Extended Warranty & Purchase Protection
This is a pre-paid MasterCard. Treated the same way as a regular  master card would be used
RBC/Visa card
One time fee of $3.95 charged to the person purchasing the card. No maintenance fees charged for the first 6 months after the Card is purchased. After this time, a monthly $1.50 will be charged until the balance on the Card reaches $0. Upon the expiry of the Card, a fee will be charged equal to the value of the balance remaining on the Card.
Because RBC Visa Gift Cards are non-reloadable, cards cannot be used make recurring payments.
This is a pr-paid gift card treated the same way as a store gift card but with the flexibility to buy at any store not at a specific store. “RBC Visa Gift Cards are not credit cards, there are some fees in place to cover the cost of providing certain services.”

Based on the above, I decided that getting the BMO Pre-paid MasterCard would be the best idea. Thus I have applied for it. What do you think?

PS: please let me know of you can read my chart... I posted this while at work and my work version of my blog doesn't show the chart all that well. It should have 5 collums ( bank/card, fees, intrest, features and what kind of card is it?)


  1. Yes I can read all 5 columns on your chart.

    And reading through the options I would have gone down the same path as you. I use a Visa debit card instead of having a CC I,m very much against having one. But a lot of companies wont accept any other method of payment.

    What is the world coming to that our only form of identification accepted is our CC