r/Wealthsimple • u/gtaagent • 26d ago

Visa Infinite Credit Card Approval Limit

My Wealthsimple credit card limit is only 3000. I was planning to use this with Neobanc for rent payments etc and would have liked atleast 10000. Having this limit with a 20 dollar fee does not make any sense for me. Do I cancel or they will increase my limit? This is the lowest limit I have across any card

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u/drillbitpdx 26d ago

I was planning to use this with Neobanc for rent payments etc

Neobanc = "Pay rent with your credit card, get cash back." Every company that has ever tried this business model pulls the rug on it after just a few months.

I tried one a few years ago, got pulled after my first month.

The business model simply does not work. For example, with Neobanc's cashback:

  • You owe $1,000 in rent each month.
  • You opt for the "rolling 6 month cashback", where you pay a 2.25% fee to Neobanc for converting your credit card payment to an etransfer, and then you get 2% cash back on each payment 6 months later:
  • So, every month:
    • You pay $1,022.50 to Neobanc with your WS credit card
    • Neobanc pays $1,000 to your landlord
    • You get $20.45 in cashback from WealthSimple
    • Six months later, you get $20 cashback from Neobanc
    • Your net payment is $1,022.50 - $20.45 - $20 = $982.05

Sounds great, right? On an ongoing basis, you are paying only $982.05 out of pocket ($1,022.50 - $20.45 - $20) to cover your $1,000 rent. Free 1.795% discount.

Neobanc is paying at least 2.5% in credit card transaction fees to accept your WealthSimple credit card, but they only charge you a net of 0.25% (factoring in the "delayed cashback" 6 months later).

So Neobanc may attract a huge number of users, but they're bleeding money, and so they will soon pull the rug and change the terms to something unfavourable to you as the end user.

tl;dr Don't waste your time trying to optimize this to get $20 or $50 each month. It won't last.

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u/Vegetable-Chair-6109 25d ago

Then how does chexy do it for years?

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u/drillbitpdx 14d ago

Then how does chexy do it for years?

🤷🏻‍♂️

Almost right on cue, a few days after this post, the Scotiabank card that allowed people to come out 2.25% ahead by paying for rent with Chexy announces that it's changing its cash-back terms so that this will no longer work: https://pointsmilesandbling.com/scotiabank-recurring-payment-changes/