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Lines of Credit for Medical Students (Scotia is the best option)

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10 hours ago, Incisor94 said:

Haven't regretted Scotia one bit. I like how you can accumulate points through Scotia rewards and have the option to apply points towards any travel booked using that card. In essence, I'm not stuck booking through Scotia's travel site which is great! Also, the conversion of scene points to rewards (and vice versa) is a lovely feature to have for those who've accumulated tons of Scene points! And the lounge visits (6 free per year) are a great bonus to have when travelling. 

RBC does give 3 cents off per litre in gas at Petro Canada but Scotias infinite momentum gives you 4% cashback at all gas stations so that goes further than RBCs card. I've tried both AmEx/Infinite Momentum and Infinite Passport/Infinite Momentum and IMO, the best combo is infinite passport visa + infinite momentum visa since it gives you lounge access and cashback which you could use on anything. Plus, recurring bills (ex. cell phone, PRESTO) get 2% cashback.

Is this true regardless of the card we get? That would make things appealing.

Were you able to get the fees waived for the infinite passpost and infinite momentum? That would be a great deal!

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16 minutes ago, jul059 said:

Is this true regardless of the card we get? That would make things appealing.

Were you able to get the fees waived for the infinite passpost and infinite momentum? That would be a great deal!

As long as you have either (or both) AmEx Gold/Infinite Passport Visa through Scotia rewards, you can accumulate points and apply it to travel booked using that card. I recently purchased a flight from Delta and used my points to pay for it after it appeared on my statement. This kind of flexibility is appealing for me!

So I had the AmEx/infinite momentum combo last year with fees waived but AmEx wasn't accepted everywhere that I was dining (used the infinite momentum at gas stations/groceries) so I switched to infinite passport/infinite momentum (fees waived) this year and its been great! Lounge access is sweet (love the free food before flights) and still get 2x the points on dining/entertainment.

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58 minutes ago, Incisor94 said:

As long as you have either (or both) AmEx Gold/Infinite Passport Visa through Scotia rewards, you can accumulate points and apply it to travel booked using that card. I recently purchased a flight from Delta and used my points to pay for it after it appeared on my statement. This kind of flexibility is appealing for me!

So I had the AmEx/infinite momentum combo last year with fees waived but AmEx wasn't accepted everywhere that I was dining (used the infinite momentum at gas stations/groceries) so I switched to infinite passport/infinite momentum (fees waived) this year and its been great! Lounge access is sweet (love the free food before flights) and still get 2x the points on dining/entertainment.

Just a tip for gas stations: Esso takes AmEx at pretty much every station except the ones with really old pumps.

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1 hour ago, Incisor94 said:

As long as you have either (or both) AmEx Gold/Infinite Passport Visa through Scotia rewards, you can accumulate points and apply it to travel booked using that card. I recently purchased a flight from Delta and used my points to pay for it after it appeared on my statement. This kind of flexibility is appealing for me!

So I had the AmEx/infinite momentum combo last year with fees waived but AmEx wasn't accepted everywhere that I was dining (used the infinite momentum at gas stations/groceries) so I switched to infinite passport/infinite momentum (fees waived) this year and its been great! Lounge access is sweet (love the free food before flights) and still get 2x the points on dining/entertainment.

You should also switch your debit card to the same point system instead of the default scene points

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2 hours ago, Canadiens1234 said:

It looks like interest rates are going to continue to increase. Are banks offering more then -. 25%?

Very skeptical they will change the rate. What the banks will do is increase limit (as many advisors on this forum have confirmed will happen). The thing about rates are that they need to reflect two components: 

  • The prevailing cost of money - which must be based on BoC decisions. 
  • Individual loan quality - medical students' LOCs have been historically safe from a credit quality POV given the the 99% match rate, default would have been relatively exceptional. The -0.25% is already quite an attractive feature of the LOC as prime is normally what a bank charges its best customers of highest credit quality. 

End of the day, the interest rate on a loan must reflect both the prevailing cost of borrowing and the individual loan quality. The increase in limit is a gesture that the banks will not compromise on further concessions on the rate. 

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7 minutes ago, PeterPatting said:

Anyone have any good experiences signing an LOC with TD? They're offering 300k (which as far as I've seen is the most out of all the big banks). Although their credits cards are more or less average (nothing ScotiaBank AmEx tier)

No experience but Scotia will likely also be offering 300k in a few weeks  + the good cards 

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20 hours ago, Incisor94 said:

Haven't regretted Scotia one bit. I like how you can accumulate points through Scotia rewards and have the option to apply points towards any travel booked using that card. In essence, I'm not stuck booking through Scotia's travel site which is great! Also, the conversion of scene points to rewards (and vice versa) is a lovely feature to have for those who've accumulated tons of Scene points! And the lounge visits (6 free per year) are a great bonus to have when travelling. 

RBC does give 3 cents off per litre in gas at Petro Canada but Scotias infinite momentum gives you 4% cashback at all gas stations so that goes further than RBCs card. I've tried both AmEx/Infinite Momentum and Infinite Passport/Infinite Momentum and IMO, the best combo is infinite passport visa + infinite momentum visa since it gives you lounge access and cashback which you could use on anything. Plus, recurring bills (ex. cell phone, PRESTO) get 2% cashback.

I thought infinite momentum wasn’t included

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1 hour ago, macd said:

Do people generally get life and critical illness insurance on their LOC?

Not life insurance unless there is reason in general for their estate to have a sum of money left over after they die. Say they have a spouse or children for instance. The debit belongs to you and no one else - if you die it doesn't get "dumped" onto someone else (some times people think their parents etc have to pay it). That isn't the case. 

Now disability insurance and possibly critical illness insurance is another matter. Once you get into medical school the major although rare financial risk is that you become disabled and unable to work. Many people do have as a result disability insurance (I have the max amount as an example) and sometimes critical illness 

 

Edited by rmorelan

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5 minutes ago, rmorelan said:

Not life insurance unless there is reason in general for their estate to have a sum of money left over after they die. Say they have a spouse or children for instance. The debit belongs to you and no one else - if you die it doesn't get "dumped" onto someone else (some times people think their parents etc have to pay it). That isn't the case. 

Now disability insurance and possibly critical illness insurance is another matter. Once you get into medical school the major although rare financial risk is that you become disabled and unable to work. Many people do have as a result disability insurance (I have the max amount as an example) and sometimes critical illness 

 

Thanks for your help!

As someone with a spouse, I assume it would be a good idea to get life insurance then? Would my LOC essentially get dumped onto my spouse if not?

I was told by my bank that you cannot get disability insurance until you are a resident because it doesn't apply to students with no income. 

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When you get life insurance, it is wise to name the beneficiary - and other than your Estate. Let us say you owe $200,000 and you have that amount of life insurance payable to your Estate. In such case, your Estate will have the $200,000 with which to pay your LOC, and must pay it. However, if you name your spouse as the beneficiary, then your spouse is the owner of the insurance proceeds of death, and does not even have a moral obligation to pay your indebtedness to any third party.

As regards disability insurance, you have no income, so there will be no pay out. You wait until you are a resident or perhaps, take it out just before you graduate as some ins companies give you the first year premium free if taken out as a student.

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13 minutes ago, macd said:

Thanks for your help!

As someone with a spouse, I assume it would be a good idea to get life insurance then? Would my LOC essentially get dumped onto my spouse if not?

I was told by my bank that you cannot get disability insurance until you are a resident because it doesn't apply to students with no income. 

ok that last point about life insurance makes no sense to me - for one thing I had it since second year, secondly you can even get it for free as a med student from the OMA. (what bank was this? That is bad advise). 

Your LOC would be dumped onto your estate technically. Your spouse isn't automatically responsible for you individual debit either. You can make him/her directly the beneficiary as well (ie not putting the debit on your estate). 

Some of this can be complex which is one of the reasons you need good professionals for things like this :)

Edited by rmorelan

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4 minutes ago, rmorelan said:

ok that last point about life insurance makes no sense to me - for one thing I had it since second year, secondly you can even get it for free as a med student from the OMA. (what bank was this? That is bad advise)

Your LOC would be dumped onto your estate technically. Your spouse isn't automatically responsible for you individual debit either. 

My last point is referring to disability insurance, not life insurance. 

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MDM and a bunch of other companies offer disability insurance for medical students even if you have no income. For instance, I have one from the AMQ/CMA that's complemented by one from RBC. I don't know who told you that but they were wrong.

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What the banks are doing by offering Prime minus 0.25 is simply bringing their prime rate in line with what it used to be. The last time interest rates were cut the banks did not lower their prime rate accordingly and so there was a larger spread between prime and the bank of Canada's key lending rate. As interest rates have risen, the banks never restored the former gap between the prime rate and the key lending rate. There for offering the line of credit at Prime - 0.25 simply brings things back into line with what they used to be

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7 minutes ago, shematoma said:

What the banks are doing by offering Prime minus 0.25 is simply bringing their prime rate in line with what it used to be. The last time interest rates were cut the banks did not lower their prime rate accordingly and so there was a larger spread between prime and the bank of Canada's key lending rate. As interest rates have risen, the banks never restored the former gap between the prime rate and the key lending rate. There for offering the line of credit at Prime - 0.25 simply brings things back into line with what they used to be

Agreed - the -0.25 is definitely more vestigial and they just kinda left it like that, which imo they will continue to in the foreseeable future. Theoretically, the big players can move in lock-step and bring everything back in line to just prime (which is still really good)

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