The TD Bank Credit Card Application’s Fine Print

TD Bank (Toronto-Dominion Bank) is actually out of Canada, but thanks to some mergers and acquisitions back in 2008, TD Bank is now doing business in the United States.

Is TD Bank the same as TD Ameritrade?

Yes and no. Same parent company, but different divisions. I’ve actually had some very negative experiences with TD Ameritrade. Hopefully their banking division (which issues the credit cards) is run better!

What’s the deal with their credit cards?

fine print on applicationIf you want a TD Bank credit card, you have 3 different options available. None of them have an annual fee and according to their applications, they all offer a minimum credit line of at least $500. Let’s do a quick review of the pros and cons for each offer.

TD Easy Rewards Visa

The salespitch: I actually find this a bit deceiving. It says “5x rewards points on purchases for first 6 months*” and if you follow the asterisk to the bottom of the page, it takes you to a link for the “Terms and Conditions.” When I clicked on it this is what I found buried in the fine print:

“During the Promotional Period, customers may earn up to 1 point per dollar spent on all other eligible retail purchases not in the categories as defined by TD Bank as dining, grocery, gas and bill pay purchases on which up to 5X rewards are earned.”

Still a good deal? For the first 6 months, yes. But I think it’s very misleading how I had to turn to the fine print on a separate page in order to discover that the 5x points only applies to a few categories, not all purchases.

TD Cash Rewards Visa

The salespitch: This TD credit card rewards program appears to be the same as the one above, except you are earning cash back rather than points. They advertise it as “5% cash back on purchases for first 6 months*” and like the other, you will find this in the fine print:

“Customers may earn up to 5% cash back rewards per dollar on eligible retail purchases as defined by TD Bank as dining, grocery, gas and bill pay for the first 6 monthly billing cycles”

On everything else and after the 6 months is up, you will only be earning 1% cash back on your spending, regardless of category. That means the TD Cash Rewards Visa card is really only a respectable offer for the first 6 months you have it.

TD Payment Plus Visa

The salespitch: A reader actually emailed me about this credit card a couple months ago. Unlike the other TD Bank credit cards, this one may actually be a good choice if you carry a balance. In a nutshell, it refunds you part of your interest charges as follows:

  • If you pay 5% to 9.99% of your balance, you receive a statement credit for 25% of your next month’s finance charges
  • If you pay 10% or above of your balance, you receive a statement credit equal to 50% of your next month’s finance charges.

I was actually quite impressed by this. But then I went to the credit card application on the TD Bank’s website to lookup the APR and as I write this review, it charges a flat 21.24% variable APR on all accounts. For a store card that would be considered normal, but for a bank-affiliated credit card that is quite high!

So when you do the math, 25% off of 21.24% takes you to what I would consider to be an average interest rate. If you pay 10% or more of your balance and get the 50% credit, that is good but you are still left with a interest charges that equal out to be a double-digit interest rate.

Verdict?

For cash back or rewards, I wouldn’t recommend these cards because after the first 6 months, you are left earning 1 point or 1% cash back on all spending, which isn’t exactly exciting.

The only TD Bank credit card I would say might be worthwhile is the Payment Plus Visa, since you can end up with a below-average rate if you pay 10% off or more per month. However if you will be carrying a balance long term and can’t afford to pay off that much each month, than that card won’t be a good idea either because the regular interest rate is so high.

Best Alternatives?

If you’re looking for rewards, these are definitely worth checking out for 2013:

  • Chase Freedom – no annual fee, 5% on categories (unlike the TD Bank rewards card, this is not a promotional offer) and 1% elsewhere
  • AmEx Blue Cards – 2 versions (1 with no annual fee) that have great cash back programs.
  • Discover it – no annual fee, 5% on categories
 
Comments
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How will I know the status of my credit card application

I have been using the TD Cash Rewards Visa since early December. The intro 5% cash back on several categories is generous BUT TD bank will not increase the credit limit above $500 until after 6 months. As a result, actually taking advantage of the 5% cash back benefit is difficult, then it goes away once you hit 6 months! You can squeeze more by making payments ahead of the monthly schedule, but then the “credit” part of being a credit card is largely defeated. Don’t bother with this card unless you have the time to manage and make frequent repeated payments to keep enough ceiling to actually be able to use the card. By and large TD offering this card is a sleazy bait/switch. Most folks would be better off with another competitor’s card. I’d rate it no more than 2 on a scale of 1 to 5.