By Melanie Dixon

A yearly credit conference has provided survey findings that show that couples continue to struggle over control of the household finances.

The findings came from a Torque Customer Strategy conducted on behalf of Credit Canada, a non-profit charitable service, and Capital One Canada, a division of Capital One Bank, as part of the national financial literacy initiative, Credit Education Week 2009. The survey was completed online by couples between Sept. 7-14, 2009. A grand total of 1,656 people participated, meaning 828 couples, from four major regions of Canada.

Credit Education Week 2009 was held from Nov. 2-6 to assist Canadians with financial management skills. This was the third year running for the initiative, with support from financial service leaders, consumer and advocacy groups, community organizations and government departments.

The survey's theme was "The Effect of the Economic Recession on Canadians and their Relationships."

The underlying points of the survey were that the recession is having a debilitating effect on Canadian couples. Twenty per cent of people have suddenly found themselves a primary breadwinner in the past 12 months.

Women particularly are concerned that being a main breadwinner is negatively impacting their relationships with their spouses.

Couples confirm that the economic downturn has added more stress and conflict to financial planning. Half of those couples claim that as a result of the recession and their inability to stick to a budget, they have been kept awake at night.

Canadians are anxious about their financial situations. Those who are now the new breadwinner of the family, are being kept awake at night over worrying about whether the money they bring in will be enough to pay the expenses.

A whopping one third of Canadians (37 per cent) have had a sleepless night over financial issues. Of those people, 26 per cent have not reduced their spending due to the recession.

Eighty-six per cent of couples are struggling and arguing extensively over financial issues.

Spending seems a more contentious issue than debt, causing concern that it may make the financial situation worse. Forty-eight per cent of couples argue about spending, as compared to the the 24 per cent that argue over debt.

More findings from the survey conclude that money is the issue that is fought over more than sex, chores or children. Couples also can't decide which partner really controls the purse strings. Surprisingly, only 6 per cent of those couples say their relationship is in trouble over financial issues. The 53 per cent who realistically believe their relationship is in trouble have seen a marriage counsellor.

The survey has also concluded that there is a gender gap over differences in money management.

Canadian couples are aware that men and women view financial issues differently. Men and women have differing attitudes on which is most important -- retirement funds or education for the children -- and these issues keep them awake at night.

Seventy-five per cent of women in families are the main ones who teach children about money.

As the recession impacts careers, women are often finding themselves the sole breadwinners of the family. While they feel this is negatively impacting their relationship with their spouses, men are less inclined to have a problem with this issue.

Deception has also been found between partners. Men and women are not only hiding large expenditures from each other, they are also lying about how much debt they already have.

A vast number of couples are not sitting down for a financial chat before entering into a partnership. The person who is not controlling the money is more likely to hide debt from their spouse (55 per cent).

A large communication gap has also been found from the results of the survey. Couples are not discussing money before they enter into their partnership. These couples are 66 per cent more likely to need to see a counsellor about financial issues.

For those couples who think their finances are on the brink of disaster, 40 per cent believe that their spouses are not open to discussing money issues.

It has been found that couples are aware of the differences in worries about money management and are accepting of this.

Couples are aware of key issues over retirement. Nearly two out of three say they will not be able to retire when they wish to. Couples who are aware of this issue have reduced spending due to the recession. While all couples are worried about mortgage issues, few are concerned.

The survey also found that the majority of Canadian couples share equal responsibility for the household finances.

Lack of financial education is rampant through the generations. Less than half (47 per cent) say that they received a basic money chat when they grew up.

A large amount of Canadians are proceeding without a budget.

Children increase financial anxiety and, as a result, people are worried about retiring when they wish to. Couples with children are more likely to hide debt from each other.

The About.com financial section recommends that each partner should hold at least one credit card in their own name, in order to build a separate credit history. That way, if something happens to one partner, the other will already have a solo credit history established.

By Cara Henis

American Express launched the first all-purpose gift card that is fee-free after purchase.

Users may spend with their card anywhere that AmEx is accepted but, unlike other brands, the value of gift card never diminishes due to monthly service fees or card replacement costs. The card also never expires.

Visa, a main rival of AmEx, usually charges a $1.50 service charge per month after six months, in addition to charging replacement fees for lost or stolen cards. MasterCard also collects fees after the first six months and users must pay to replace lost or stolen cards, according to the Star. Both Visa and MasterCard products expire.

With gift cards forecasted to be the top holiday present this season, AmEx hopes to snag a larger share of the approximately $6 billion gift card market, while also revolutionizing the industry.

"This is going to force other companies in the gift card space to follow our lead," said Howard Grosfield, vice-president at American Express Canada, to the Toronto Star.

"We are setting a new standard among gift cards," said Grosfield, in a press release.

Shoppers may purchase the gift card at Shoppers Drug Marts nationwide for a cost between $4.95 and $6.95.

By Melanie Dixon

Canadians are more likely to turn to credit cards in times of emergency than citizens in 14 other countries of the world, according to a survey on household financial stability.

Twenty-eight per cent of Canadians said they would finance an emergency with a credit card, while 13 per cent would use a home equity credit line or second mortgage. While only 8 per cent of Germans would use a credit card, they tied with Canada with 13 per cent willing to apply for a home equity line or second mortgage. Luxembourg was next in line to Canada with 27 per cent being agreeable to using a credit card, and only 6 per cent of the Dutch were as agreeable.

The United States and the United Kingdom have a 20 per cent willingness to use credit.

The TNS Personal Risk Assessment and Risk Literacy Study was conducted between June and September 2009. The survey asked 14,600 people in 15 countries whether or not they could find $2,000 (or equivalent in their countries' currencies) in an emergency, whether for health care costs, car or home repairs, and exactly how they would find the money.

Rhonda Grunier, director of financial research at TNS, said in a release that while credit is extremely simple to obtain in Canada, it is a poor choice to take on additional debt. Canadians have been encouraged to save money into RRSPs, but are obviously reluctant to cash them in due to tax complications.

Canadians are confident in their ability to attain the funds quickly, with 68 per cent saying they could meet the deadline. Eighty-nine per cent of citizens from Luxembourg were at the top of the poll, believing they could get the money quickly.

Countries at a low confidence level were Mexico (41 per cent), the United Kingdom (44 per cent), the United States and Germany (both 46 per cent).

Those Canadians not choosing to use a credit card would dip into their savings account at 52 per cent. Luxembourg (86 per cent) and Netherlands (89 per cent) would be willing to cash out their savings.

The most financially confident region of Canada is British Columbia (76 per cent), with least confident lagging behind in the Atlantic provinces (57 per cent). Thirty-one per cent of people in B.C. are also eager to use credit cards for an emergency.

Men in Canada are 75 per cent more financially confident than women at 62 per cent.

The other countries surveyed had negligible results with fewer than one in 10 willing to use a credit card to fund an emergency.

By Julie Sherrier

In a much-anticipated move, Finance Minister Jim Flaherty announced a new code of conduct for credit and debit card issuers on Thursday.

While voluntary, the new code will be effective Jan. 1.

According to the Vancouver Sun, "The biggest change -- mandating Canada's federally registered banks to grant their customer a minimum 21-day, interest-free grace period on all new credit card purchases when a customer pays the outstanding balance in full -- won't take effect until next September."

Among other changes:

• Cardholders must agree to any credit limit increases first.
• Debt collection practices are reined in.
• Over-the-limit fees will not be allowed if they are caused by holds on the card.
• Merchants now have a choice to which payment vehicles they want to offer.
• Cardholders must be given 90 days notice of any fee changes
• Interchange fee amounts must be available online to merchants.

The code was developed in reaction to complaints by merchants who are have to pay high interchange rates. Once in effect, merchants will be able to shop around when making payments, says David Wilkins, senior vice president at the Canadian Council of Grocery Distributors.

By Melanie Dixon

In a recent survey, deception is rampant in Canadian couples, but money is the issue, not infidelity.

The more committed the relationship, the more likely a partner will own up to an expenditure. Not surprisingly, couples in the most casual of living arrangements are least likely to own up to spending habits.

According to findings from a Torque Customer Strategy survey conducted on behalf of Credit Canada and Capital One Canada as part of the national financial literacy initiative, Credit Education Week 2009, Canadian couples are intentionally deceiving their partners about money and spending habits.Deception can easily be achieved through the use of secret credit cards.

There is little margin in the results between men and women. In the survey, 19 per cent of men and 22 per cent of women admitted to hiding debt from their spouses.

Thirty-one per cent of women have deceived their spouses over how much money they have spent on a purchase, while 27 per cent of men say they have lied about a purchase.

A partner is 55 per cent more likely to hide a debt from a spouse if he or she does not control the household money, leaving the one handling the purse strings to walk around with blinders on.

Couples who have a solid commitment seem to be least likely to hide debt. Only 19 per cent of married couples admitted to hiding debt, while 25 per cent of common-law couples admitted to it. Thirty-five per cent of couples living together but not married admitted that they have lied to their partners about how much money they have spent.

Sixty-six per cent of these couples entered their relationship openly disclosing their finances. However, this leaves a large number of spouses who are going to be in for a big surprise a few years down the road.

The main results of the survey indicate that people in relationships are hiding large expenditures from each other, as well as disguising the resultant debt load.

Full disclosure of finances is the key to success in a relationship. Without it, it's no wonder that many relationships are headed down the drain after the money has seeped through.

By Cara Henis

Worries regarding merchant fees and billing practices are prompting members of the Liberal caucus to call for more protection than would be provided by a voluntary code of conduct.

The caucus is pushing for government regulation that will give retailers more power to negotiate credit card fees and pick which debit card networks to use. It is also requesting legislation to end double-cycle billing and allow consumers to opt-out of credit card contracts if their interest is raised. Double-cycle billing occurs when interest is calculated on two full cycles of credit card balances, even if the customer has already paid off one of those balances.

The voluntary code, authored by Conservative Finance Minister Jim Flaherty, is an attempt to ease concerns sparked by the entry of Visa and MasterCard into the debit card market. Guidelines are expected to focus on routing, rate and fee disclosures, and the use of "dual purpose cards," which function both as debit and credit cards. According to reports spanning back to mid-October, the code is nearing completion. Yet some Liberal party members fear debit and credit card companies won't "volunteer" to comply.

"Without enforcement, a new code of conduct for debit and credit card companies is not a sufficient response," said Dan McTeague, Liberal consumer affairs critic, in a press release. "We need some concrete, enforceable measures that will deal with the issues of double-cycle billing, little transparency and high fees for merchants."

The Standing Senate Committee on Banking, Trade and Commerce is also considering whether government regulation of the debit and credit is advisable. According to a report released in June, a decision will be issued in December.

Yet proponents of an unregulated market say government intervention may indirectly harm consumers. They cite Australia's increased credit card fees, card benefit reduction and the introduction of surcharging as consequences of interchange fee regulation policy. An interchange fee is the amount a retailer must pay to a credit card processor for accepting the credit card. Surcharging occurs when a consumer is charged an extra fee when they purchase a product.

An April 2008 assessment of interchange regulation by the Reserve Bank of Australia paints a less-than-rosy picture.

"Lower interchange fees in the MasterCard and Visa credit card systems have resulted in a reduction in the value of reward points and higher annual fees, increasing the effective price of credit card transactions facing many consumers," according to the report. "Surcharging has also led to a significant rise in the effective price of some credit card transactions."

Australians pay approximately AU$480 million more in credit card fees each year because of the regulation, according to research by Charles River Associates, a consulting firm. The firm concluded that merchants have profited from government-capped interchange fees, but have not necessarily passed on the savings to consumers.

Yet such staunch regulation isn't likely in Canada -- at least in the meantime. Flaherty is expected to avoid talk of fee and rate caps and instead emphasize more transparent disclosure of fees.

By Cara Henis

The Bank of Canada will maintain its key interest rate at 0.25 per cent in order to prevent the dollar from becoming too strong.

Though the economy is showing signs of recovery, market volatility and the robustness of the Canadian dollar are slowing economic growth, bank officials said.

"The current strength in the dollar is expected, over time, to more than fully offset the favourable developments," according to a Bank of Canada press release.

By keeping key interest rates low, officials hope to circumvent the problems associated with excessively strong currency. The key interest rate is the amount banks charge one another when they borrow among themselves. Altering it has broad-reaching effects on consumer loan and mortgage rates, and the exchange rate.

The bank's decision is likely related to its trade relationship with the United States. About 80 per cent of Canada's exports are purchased by the United States, according to the Associated Press. If the cost of purchasing such products were to substantially increase, Canada could lose a major trading partner.

The record-low key interest rate has been in place since April 2009 and the bank plans to hold the rate steady until mid 2010.

By Melanie Dixon

Canadians without credit or debit cards or those who are concerned with making online shopping payments will soon be offered a safe alternative in the form of Ukash e-cash, an electronic payment system already available throughout the rest of the world.

Ukash is the fastest growing e-commerce payment solution offered globally. E-cash is made available for consumers through point-of-sale terminals, with the purchase of vouchers in set Canadian dollar amounts of $25, $50, $75, $100 and $150. It is offered through VendTek Systems Inc. under its brand Now Prepay.

Doug Buchanan, president of VendTek, said,"Ukash offers an electronic cash payment source and an important solution for people who are looking for an alternative to credit cards. We have been interested in an online payment product for our network and Ukash has an e-commerce payment solution that is an excellent fit with our network," in an article published by Ecommerce Journal.

Ukash offers a safe and anonymous alternative to making online payments to any business anywhere in the world, without using a credit or debit card. It is also a secure solution for the 70 million consumers in North America who currently do not qualify for a credit card or a bank account. Canadians will be able to buy these vouchers from independent convenience stores and gas stations.

Ukash will initially be introduced in Ontario at 4,000 point-of-sale terminals, then expanding throughout the rest of Canada to 15,000 outlets before the end of the year. Canada will be the first country in North American to adopt the new e-cash solution.

Ukash is currently available in the U.K., mainland Europe and South Africa, including an extension to Australia in August 2009 and South America in October 2009.

In 2007, Canadians placed nearly $12.8 billion worth of online shopping orders, presenting an opportunity for Ukash to tap into the market of consumers who currently have no method of paying for online orders, or are hesitant to do so due to online fraud concerns.

Mark Chirnside, chief executive officer of Ukash said, "North America is a territory with huge potential for the Ukash proposition. High rates of unbanked consumers at this time, largely due to poor credit history and immigrants unable to get bank accounts, means that there is a growing number of cash consumers who want to spend online. Canada is a key territory for the Ukash proposition and working with Now Prepay will give us the prominence needed to expand our availability across Canada before launching in other countries across the Americas."

Ukash has taken the opportunity to offer simple, anonymous and safe online cash payments to the 70 million unbanked consumers in North America without even a credit or debit card to their name. There will be a fee to purchase Ukash vouchers in Canada. Vouchers are currently available for purchase at over 300,000 vendors globally.

By Melanie Dixon

Finance Minister Jim Flaherty has issued a statement about the final flourishes being written into the "voluntary code of conduct" that will govern Visa's and Mastercard's entry into Canada's profitable $168 billion debit card territory.

According to the Times&Transcript, the code of conduct will govern inflammatory issues such as priority routing of debit transactions over Visa and MasterCard's networks. The code will also address issues such as the use of "dual purpose cards" that will have both debit and credit functions, plus full rate and fee disclosures.

Unfortunately, since the code is voluntary, critics are crying that it will offer no protection for retail businesses or small business owners. Owners are concerned that fees will skyrocket after Visa and MasterCard debit cards are in full circulation, which will either cut into their profits, or be passed down to already cash-strapped consumers.

Currently Canada has an enviable low-cost debit system. This could be eroded by the new players on the block.

The Toronto Star reported that Flaherty will be issuing an announcement in the following weeks regarding measures to address concerns on the new credit card regulations.

The paper also reported that Flaherty is likely expected to steer clear of fee and rate caps, though the code should have a stricter fee schedule.

There is opposition from Bruce Cran, president of the Consumers Association of Canada. He says, "We would like a credit card to be a credit card, and a debit card to continue to be a debit card."

Businesses and consumers alike will be eagerly awaiting a workable solution to address these issues and concerns when the voluntary code of conduct is revealed.