Sometimes, I wonder why not all merchants use PayPal to process their payments. I believe the reason is that they think that PayPal’s discount rate is higher than other payment gateways. In fact it is lower – much lower. Here’s why:

The cheapest reliable merchant I know of charges a monthly fee of about $25 and a 3% discount fee as well as 25 cents transaction fee for US/Canadian transactions. The discount rate jumps to 3.9% for international transactions.

PayPal on the other hand, charges a monthly fee of nothing (yes – you heard that right, they charge nothing, zero, zilch, nada), a discount rate of 2.9% and a transaction fee of 30 cents for US/Canadian transactions. As for international transactions, the discount rate is 3.9%. Additionally, the discount rate is lower for volume merchants, so, for those processing transactions of more than $3000 per month, the discount rate is 2.5%, and, for those processing transactions of more than $10,000 per month, the discount rate is 2.2%.

Nothing is perfect, however, and PayPal has a huge issue for non-US accounts. PayPal restricts non-US clients to bank accounts in their local currency, which means they’ll incur hefty exchange rates every time they transfer money to their bank account. For example, if you live in Canada, then PayPal will only accept a Canadian dollar bank account to be linked to your PayPal account, and will only transfer money to your account in Canadian funds. So, if you have $10,000 USD in your account, and the current USD/CAD exchange rate is 1.05, then expect to receive only CAD 10,250 in your account (they usually take about 250 points). This is bad – but what makes up for it (besides the low discount rate) is that PayPal will never charge you a chargeback fee.

In any case, PayPal is ideal for US based clients, so I suggest you use them if you live in the US. They also have an easy to use API (for $30/month) that will allow you to integrate payment processing seamlessly on your website.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

Yes – I know – I am writing a lot about lines of credit, but it seems that my readers are enjoying my posts about it. In today’s post, I am going to discuss how to cancel a line of credit.

The easiest way to cancel your line of credit is to simply call your bank or just walk in to any branch and ask them to cancel it. That’s it. The bank should cancel the line of credit for you within a couple of days, and it should be removed from your account then.

But, what if you still owe money on your line of credit?

Well, you need to pay out that money before canceling your line of credit. Another option would be to lower your credit limit on your line of credit (the bank will agree to that immediately).

Will canceling your line of credit affect your credit rating?

Definitely! But, in this case, it’ll improve it. It’s because technically you will have less potential debt in the eyes of the potential debtor. In fact, nearly all banks will ask you to cancel your line of credit if you have any before getting a home mortgage.

Will it be easy to get back the line of credit once its canceled?

Unless your economic conditions change for the worse or your debt level has substantially increased, then it should be easy to get back your line of credit. Note that some banks will leave the line of credit open (from their end, often without the knowledge of the client) for 6 months after cancellation in case the client wants to revive it, so, when the client calls to get back his line of credit, they’ll do it immediately. Some banks even inform the client in writing a few weeks after his account cancellation that he can immediately revive his line of credit anytime within 6 months after its cancellation by simply calling them.

Is it a wise move to cancel a line of credit?

I personally don’t think so. The line of credit is an excellent safety net and usually provides a competitive interest rate unlike the loan shark interest rate of a credit card. Unless you want to cancel the line of credit because you have to (such as to improve your credit or because the bank told you to) then I suggest you keep it. It’s excellent for those gloomy days.

To conclude, cancelling a line of credit is easy and feasible – but, before doing that, don’t ask yourself: “Do I really need this line of credit” but rather ask “Do I really need to cancel this line of credit?”. If the answer to the latter is yes, then go ahead, cancel it – otherwise you should keep it. You never know when you’re going to need it.

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October 17, 2013 | In: Technology

256 GB Isn’t Enough!

While shopping for a laptop, I noticed a trend in many companies: they are using small-sized hard disks on their high end machines. These companies include Sony, Lenovo, Toshiba, and the likes… Samsung even has 128 GB hard disks on its high end machines. While these hard disks are all SSDs (Solid State Drive), which are considerably faster (and I’m talking from personal experience here) than the previous hard disk type, they are still quite expensive and they are small.

On my current laptop, which I use for development and other professional activities, I am using about 180 GB, and I don’t download any movies or music. Which means that if someone is doing these types of downloads (and I suspect that many people do), then definitely the 256 GB SSD isn’t enough.

I don’t know whether it’s the hefty price of the 512 SSD option or the fact that most companies are trying to push us to use this so called “cloud” storage (cloud storage means storing your personal files on an a server on the Internet – more or less like a document management system, but with a fancy marketing name) that is the cause of this issue, but the 256 GB is not an option for many people out there in this day and age. I wonder how long it’ll be before these large companies discover this.

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I have explained early this year how to get an unsecured line of credit in Canada – since then, I got several people asking me on the difference between an unsecured line of credit and a home equity line of credit so I have decided to clarify the differences between the two in a post:

  • An usecured line of credit has a higher interest rate than a home equity line of credit. The former’s interest is anywhere from 6% to 11%, the latter’s interest is usually about 2% to 4%. This is because the line of credit’s interest is usually Prime + 3% to 8%, while the home equity line of credit’s interest is usually prime ± 1%.
  • A home equity line of credit is a type of mortgage. In fact, with a home equity line of credit, you are mortgaging the part of your house that you already own (e.g. your capital in the house). In an unsecured line of credit, you don’t mortgage anything.

  • The credit limit on a home equity line of credit is usually much higher than that of an unsecured line of credit. The unsecured line of credit limit can be anything between $10k to $50k, while that of the home equity line of credit can be more than $100k. The credit limit on a home equity line of credit is tied to the current worth of your capital in your home. The credit limit on an unsecured line of credit is mainly tied to your income as seen by the bank.

  • Both types are approved quite fast, but a home equity line of credit is usually approved faster.

  • Approval criteria is different: for a home equity line of credit, the person approving your request only looks at the value of your current capital in the house. For an unsecured line of credit, the person approving your request checks your monthly income flow, your history with the bank, and your credit rating.

  • Typically, your minimum payment for a home equity line of credit is the monthly interest, while the minimum payment for an unsecured line of credit is usually 3% of the whole loan amount or the interest rate, whichever is higher.

  • Both the unsecured line of credit and the home equity line of credit are free from fees. There are some banks, however, that charge some fees on either one, or on both – but this is the exception and not the rule, and these fees can be certainly be negotiated.

  • An unsecured line of credit has a more volatile interest rate than a home equity line of credit. The latter’s interest is more or less static and varies only if there is a substantial change in the interest rate set by the government.

I hope that I have clarified the differences between the two lines of credit. If you feel that I omitted something, then please, feel free to share in the comments section.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

Many Canadians think that when a product is labeled as “Made in Canada”, then this means that every single component of that product is Canadian. This cannot be further from the truth. In fact, a product labeled as “Made in Canada” can have all of its products from a foreign origin. Let me explain…

The Canadian Competition Bureau states that manufacturers are allowed to stick the “Made in Canada” label on their products if:

  • The product’s last substantial transformation occurred in Canada AND
  • At least 51% of the costs incurred to create the product took place in Canada.


Probably your first question would be, what do they mean by last substantial transformation?

Let’s assume that you have a Quebec company called Troupeecano which sells orange juice in milk-like containers. Troupeecano imports the orange juice from the United States, and the containers from China. Now, once its have the goods in its Quebec factory, Troupeecano then mixes the United States orange juice with some water and sugar, puts it in the containers, and sells it to the public. That last step is the substantial transformation of the product, and it did indeed take place in Canada.

Troupeecano incurs about 60% of the costs of producing the canned juice in Canada – and this allows Troupeecano to stick a Made in Canada label on a Chinese made box with a US made juice. In short, when something is labeled as Made in Canada then it should really read as Packaged in Canada – but hey, that’s how things work.

But, what is really made in Canada?

When something is really made in Canada, it will say Produce of Canada. A product is eligible to be a Produce of Canada if:

  • The product’s last substantial transformation occurred in Canada AND
  • At least 98% of the manufacturing/producing costs were incurred in Canada

Of course, the latter condition makes it really hard to buy something from China, package it in Canada, and sell it as Produce of Canada (unless, of course, you are buying something from China for $2 and it’s costing you $98 to package it in Canada). That’s why anything that has a “Produce of Canada” sticker is usually a carrot or a potato. Which takes me to the heart of the problem…

Most of Canada’s goods produced, including food and clothing, are not really made in Canada (even though technically they are). They are just assembled/packaged/sewn in Canada – their components are made elsewhere (usually China). This is a huge issue – we depend on other countries to eat and to be warm, which is a really dangerous strategy, because it makes us at the mercy of these countries.

I think Canada must and can be self-dependent. I think that Canada can produce a car from scratch – with no components whatsoever from other countries, I think that Canada can produce a laptop from scratch, I think that Canada can grow its own food and then package it and sell it to its residents and the world. Canada can be all that (because it has all the needed resources) – and once Canada becomes that, it’ll be an extremely powerful nation and a beacon for other countries who want to do the same but are afraid of doing so because it’s just too hard.

The problem is that nobody sees a problem with how things are at the moment, and this is not just in Canada, but in every country in the world, except of course, China.

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The best laptop that I have used, by far, is the Vaio Z. That laptop tolerates shocks resulting from 6-feet drops, is very fast, is very reliable, and, is one of the few laptops out there that are made in Japan (and trust me, there is a huge difference in build quality between Japanese and Chinese made laptops).

For some reason, Sony halted all Vaio Z laptops production indefinitely at the end of 2012. It was a very disappointing move for many Vaio Z owners who have used this laptop for ages. That Laptop was the business laptop – it was also great for development (I’m also a developer, by the way). Everyone loved this laptop (or wanted to have this laptop) and some were buying it since the early 2000’s. Sony’s offering right now for these people that used to buy the Vaio Z is the Chinese made Vaio Pro (a laptop that can’t even connect reliably to the Internet) or the non-practical Japanese made Vaio Duo (a laptop that can’t be used to do actual work, with very small keystrokes and very small fonts that are barely visible). Both run Vaio 8 which is a horrible system for business people and developers. (I’ve never criticized a Windows version by the way, but I think that Windows 8 is just hideous in every sense of the word).

I have no idea why Sony canceled the Z line of product – it was a prestigious, beautiful, and solid laptop that people were happy to shell out a few thousand dollars to buy – and now they can’t, because it’s no more! The thing is the other options that Sony is offering (the Pro and the Duo) are not good at all, so high end users are looking at other brands now, mainly Lenovo and Samsung. Sony lost a whole market by doing this move.

I think Sony still has a chance of regaining this market if the Vaio Z line is revived as soon as possible. They should make sure of 2 things though: that the Vaio Z is produced in Japan, and that it uses Windows 7 ( and not 8 ) as the OS, at least until Windows 8 becomes usable.

I love Sony and I love the Vaio Z line – and I suspect there are thousands – if not tens of thousands who are willing to buy the Vaio Z if it’s revived, regardless of its price. Not everyone out there wants to buy $300 laptops.

By the way, Sony’s stock (NYSE:SNE) has doubled this year – but mainly because Sony is selling a lot of assets (including its US headquarters) to reduce its overhead and make it look as if it’s profitable. Sony still has a chance though, by remembering that everyone is willing to pay a premium for their brand, and by remembering that they can still produce the best technological products.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

Canadian banks have been rushing to invent new fees since 2008. This strategy is important to maintain their growth and inflate their stock value. One of the recently added fees is the dormant account fee. That fee was added a few years ago by one bank (don’t know exactly which one) then others followed (these bank fees are contagious).

In any case, while walking into TD yesterday, I noticed that they have waived all the dormant account fees. This was very odd, considering that TD likes new fees and new regulations (everytime I go there, there is either a new fee or a new regulation). I thought to myself, could it be that the regulating body/government banned such fees?

So, when I came back to my office, I did a quick research on the subject and found nothing supporting my theory. What I only found was that banks have to transfer dormant accounts to the Bank of Canada after 10 years. The Bank of Canada then holds the dormant accounts for 30 years or 100 years (30 years for accounts less than $1,000, and 100 years for accounts more than that). After that period elapses, the monies are transferred to the Receiver General for Canada (e.g. the Canadian government gets the money).

My research also revealed that all other Canadian big banks are still charging this fee. My guess is that TD thought that the whole fee was not worth it and it was causing a lot of overhead. So, in short, it is legal to charge a dormant account fee, but TD just recently elected not too!

So, why does an account becomes dormant?

There are several reasons:

  • The account owner died and the heirs (if any) did not chase after his/her account.
  • The account owner forgot about his account.

  • The account owner left Canada for an extended period of time – this is mostly the case for reverse immigrants.

But is the dormant account fee ethical?

That’s a question of opinion. I personally don’t think it is – especially when taking into consideration that most of these dormant accounts belong to dead people. Additionally, the actual cost of a dormant account for the bank is zero, so, there’s no reason really to charge these fees.

Expect more fees from Canadian banks in the next couple of years since the media is stating that the economy is slowing down, because in a slow economy, banks need to create new fees/raise old fees to make-up for lost income, and, in a booming economy, banks feel the urge to create new fees/increase old fees because people can afford it.

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October 12, 2013 | In: Opinion

The MBA Is a Scam

A few years ago – I applied for MBA candidacy at Concordia – twice. I even published my statement of purpose on this blog.

The first time I was accepted, I didn’t have the time to attend even the first session, so I opted out. The second time I was accepted, I attended a week and then I dropped it because I realized that the whole problem is nonsense, here’s why:

  • Many of the people who got accepted in the program were less than 25. It was a bit weird because all candidates were supposed to have a few years of managerial experience. So, either these people had outstanding skills, or they lied in their application. Judging from the conversation I had with a few, I’d go with the latter.
  • The first course I took was with a professor whose last name was apple something. Can’t remember exactly. The course was about Organizational Management if I’m not mistaken. In the very first session, the professor asked us to read about 10 white papers, each about 20-30 pages long by Thursday. We were on a Tuesday. I don’t know about others, but I think it was stupid.

  • The second course I took was a Finance course given by a professor who can’t speak understandable English (and neither French, for that matter). Now, I’m an immigrant myself so if anyone has some “you’re racist remarks” stuff, please keep it to yourself. Additionally, that professor assumed that everyone in the class took advanced finance courses previously, which was a very wrong assumption.

  • The whole program was generally amateurish where professors didn’t know exactly what should be taught and shouldn’t. In any case, anything useful that can be learned in an MBA class can be learned in real life.

The above reasons alone were enough for me to dump the program and never look back. A contributing factor to my decision was the fact that a previous manager in the company I used to work for was a mentor in the MBA program at McGill. That manager hadn’t even finished high school and was making less than $150k a year. Enough said! The owner of the company I used to work for (who was a great leader), was right when he told me, “Why on Earth do you want to do an MBA? Look at their mentor!”

But the answer to his question is that the MBA is being marketed as the path to the big dough jobs. Yes – if you want a $200k+ job, then you should do an MBA, it’ll propel your career! I think whoever did an MBA knows that this is a lie. An MBA only gets you undeserved prestige, and that’s about it. It won’t land you a good job and it won’t turn you into a better man (or woman).

Now, perhaps a good question is, why are universities focusing on this program and promoting it as the next big thing? Well, it’s obvious, isn’t it? Money! Unfortunately, universities worldwide have ceased to be non-profit organizations and they are all now for-profit (although they all claim to be non-profit for tax reasons and to get subsidy money). In fact, an MBA degree worldwide costs about $60,000. Yet, at Concordia for example, you only pay about 10% of that if you’re are a Quebec resident, because the rest is subsidized by the government through other people’s tax dollars. That is sad! What’s even sadder is that most of these Quebec residents leave Canada altogether once they get the citizenship and work in other countries where the pay is much more lucrative and tax-free. So, even if the MBA does have a small intrinsic value, it’s rarely used to benefit Canada that subsidized it in the first place. Very sad!

Now, if a Canadian university charges $60,000 for the program, and if it accepts about 100 students every year (which is more or less the exact number), then the total cost for these students would be $6 million (not too bad to handsomely pay some lame “doctors” and save some money on the side to fund other nonsense programs so that they can extort even more money from the government) about $5.4 million of which are paid by the provincial government directly and the federal government indirectly. That’s too much money to fund a fake degree for people who don’t deserve it!

So, what needs to be done?

I think the government should stop subsidizing these so-called “programs” such as the MBA. One university that did the right thing was McGill, which willingly opted out of the government subsidy a few years ago and now their MBA costs $70,000 to be directly paid by the student. The provincial government, however, fought McGill’s decision but the latter did not change its mind. Why does the government still insist on funding this nonsense is just beyond me. Maybe I’m wrong, but I don’t think that people, in any society/country, are entitled to free (or mostly subsidized) higher education.

Perhaps, at one point in time, a couple of decades ago, an MBA degree was real when only a few prestigious universities offered it, but now that its value is diluted by Bugs Bunny/online universities worldwide offering MBAs, it has become a waste of time and money – and some, including myself, think of it as a sophisticated scam. The problem is, neither the government sees this and nor the majority of taxpayers care. It’s only a waste about $5.4 million dollar per program per university, after all!

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I have purchased some shoes for my wife from Puma’s online shop (they do have a nice collection). The total order came down to about $124 and I was told that taxes will be calculated at checkout. I paid with PayPal and I wasn’t charged any taxes. That was weird, I thought… Shortly after, I received an email confirming the order (and thanking me) – the total was $124 (as originally stated).

I felt that there was something funny – so I kept some monies in my PayPal balance, just in case. The payment status on PayPal was “pending”. I made the order back on Sunday.

Fast forward to today, I received an email from the merchant telling me that my order is shipped, and that the order’s amount was $130.20 ($124 for the order and $6.20 for the taxes). I thought that it might be that Puma will collect the $6.20 when the item is delivered. No problem, I thought…

However, when I logged in to my PayPal account a few minutes ago, I noticed Puma withdrew $130.20 from my account instead of the original $124. I looked up the order details and it had the original $124 plus an additional $6.20 (which was labeled as “Additional Authorization”).

While I expected something like that, I really didn’t like the idea where a merchant is unsure of how much money you should pay, and then charges you extra (without your explicit authorization). I also wondered, can they actually do that? Well, a quick research revealed that they could. In fact, any merchant can re-authorize an additional $75 to any order – that re-authorization can be for taxes, duties, shipping, tips, etc… But the re-authorization has to happen within 29 days of the date when the order was placed.

This “Additional Authorization” can be a huge pain, because some people don’t have enough money in their PayPal accounts to cover the additional charges, so PayPal tries to capture the money from their connected bank account. If the latter doesn’t have enough money, then a hefty overdraft fee will be charged (sometimes it’s $30). Additionally, it might be that the connected bank account is in another currency than that of the order, so the money withdrawn will also be subject to an (often unreasonable) exchange rate.

So, how can one address this problem? Should he call the company he made the purchase from, or should he call PayPal? Well, if you call the company you will get answers such as: “We don’t know anything about this…”, “Your order seems fine…”, “It might be that PayPal was having a glitch when you first made your order…”, etc…

If you contact PayPal, then you will be redirected to the page linked to above. They will tell you that the merchant has the right to capture more funds (for various reasons) from your account – up to $75.

I think the “Additional Authorization” concept can create a lot of issues, because most people don’t expect to pay more money for something after they have already paid it. The thing is, this feature is needed for those many merchants who run a poor e-commerce system that is not able to calculate their various fees properly. Some merchants (especially fast food restaurants), however, abuse of this feature by dinging their customers with an additional charge that should be optional to pay.

Hope this post helped someone, somewhere!

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

Many who owe credit card companies balance on their bill do not even know how the interest on that balance is calculated – they pay it without asking a question, and they are always skeptical about the amount of interest charged (in other words, they think they are being robbed by their credit card company).

Since the issue of credit card interest is a common issue that affects a very large population in North America, I have decided to write a quick guide explaining how credit card companies charge interest…

Let’s start by assuming the following:

  • You have a balance of $0 on your credit card.
  • Your credit card company charges you 20% yearly interest on purchases.
  • You are only making purchases (and not using the cash advance functionality – this assumption is made because cash advances usually have a different [higher] interest rate than that of purchases, and there are fees associated with cash advances)
  • Your credit card company charges you interest on the 20th of every month.

Now, on the month of March, you made the following purchases:

  • $1,000 in an airport on March 10th.
  • $200 in a grocery store on March 18th.

Your invoice gets issued on April 20th, instructing you to pay at least the minimum payment (usually $10) by May 10th. The invoice amounts to $1,200. You make a payment of $200 before that date – so, while you did make the minimum payment, you will be charged interest because you haven’t paid your invoice in full.

Now, on the month of April, you make the following purchases:

  • $1,000 buying a laptop online on April 10th.
  • $200 on clothes on April 18th.

On May 20th, you login to your bank account, and you are surprised to see that your credit card invoice was $2,238.90 and that the interest charged is $38.90. Huh? You start wondering, how did they calculate the interest? Well, here’s how:

The $200 payment made back on April goes to your last credit card purchase (most banks follow the LIFO [Last In First Out] system for payments), which means that you haven’t paid anything from that $1,000 purchase at the airport. Now, all credit card companies charge interest from the day that the purchase was made in case the balance wasn’t paid in full, which means interest has been accruing on that $1,000 airport purchase from March 10th until May 20th (a total of 71 days), which means that the interest on that purchase will be the following: $1,000 x 71/365 x 20% = $38.90.

Now, after being relieved that the bank didn’t rob you, you make a payment of $238.90 to the bank, which lowers your balance to $2,000. On the month of May, you make just one purchase of $1,000 (an expensive gift for the wife – which is something that you shouldn’t do if you’re not able to pay your bill in full, but I’m not judging here).

on June 20th, you login to your bank account again, and you see that your invoice is $3,055.88. Here’s why…

$38.90 from the $238.90 that you have paid on the month of May when to settle the interest (which was $38.90), and $200 went to settle the last purchase for that cycle (which was the $200 purchase of clothes). This takes back the total to $2,200, but – since you haven’t paid for that laptop you have purchased on April 10th, you are charged interest for 71 days (from April 10th until June 20th), totaling $38.90. Additionally, you will be charged interest for the $1,000 purchase you have made on the airport, but this time from the last time you were charged interest (e.g. from May 20th) and not from the date of purchase, which means that the $1,000 will be charged interest for 31 days, or $16.98. The sum will be $1,000 (airport purchase on March) + $1,000 (laptop purchase on April) + $1,000 (Gift for the wife on May) + $38.90 + $16.98 = $2,055.88.

Now that things are very clear for you, make your payments on time and try to lower your balance every month by not buying things that you don’t need, because if you buy things you don’t need you’ll soon sell things you need (that’s Warrent Buffet who said that).

Hope the above tutorial helped!

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