Why are U.S. credit card signup bonuses so much better than Canada's?

Envy our neighbours to the south.

No, not for their warm southern coastline or larger Netflix movie catalogue, but because in the financial sphere, customers are given more. Much more.

The credit card space is where you really notice how much us Canadians are getting shafted. U.S. consumers have access to a wider selection of credit cards to choose from — not only that, but in some cases, they get better sign-up bonuses for choosing one of those credit cards.

Take a look at what NerdWallet considers the best sign-up bonuses in the U.S. Notice anything? The majority of the cards listed aren’t available in Canada.

So what’s going on? A few factors are at play.

Financial competition is fiercer in the U.S.

In Canada, the most common financial experience for Canadians continues to remain that of walking into your local bank branch, sitting down with a customer service agent, and getting upsold a bunch of financial products you don’t need.

With six banks controlling the vast majority of Canadians’ finances, it’s no wonder that companies here don’t have to fight very hard for your business.

In the U.S., it’s a different story. There are the big players, like Wells Fargo or Citibank, but also a bunch of smaller regional players. You have hundreds of financial institutions incentivized to offer better rates and deals to get customers from each other.

That’s why you’ll see companies like American Express and Chase duking it out in the U.S. and offering some eye-popping bonuses for signing up to their credit cards. In Canada? Well, Chase doesn’t even offer their best cards here.

Canadians are financially sheepish

At the end of the day, we just don’t demand as much. Studies show that Canadians are slower to adopt new financial technologies. Most appalling, the majority of Canadians go to a single institution to get a mortgage quote. They never even bother to shop around.

Simply put, financial institutions up here don’t have to fight for your business. You readily give it to them in an effort to make your life easier.

How do you make a difference? Well, use the alternatives. Don’t just get a credit card offered to you by your bank. Shop around. Don’t just sink your money into a mutual fund offered by your teller. Look at the robo-advisor options out there.

Start thinking about how you can strategically withhold your business from the banks. They’ll get the message and actually start fighting for your money.

More debt, fewer options

Historically, it’s been Americans who have been more liberal with their debt than Canadians. That use to explain why credit card companies and banks flooded the U.S. market with a lot more options.

But Canadians in the past few years have surpassed Americans in the amount of debt we hold. In fact, we’re among the most indebted nations in the world right now.

Even with the debt-binge going on here right now, we’re still saddled with less choice.

Things have been improving. In some spaces, such as the low-rate market, companies are seeing opportunities and launching new products, like the Amex Essential card that landed in Canada last year.  

But as long as Canadians are not willing to complain about the lack of choices here, companies will continue to give you second-rate offers. Because why appease a population that doesn’t even bother to complain?