Found 20 posts tagged as "Credit Cards"
We recently blogged about a website that aimed to find the best credit cards in Canada. While not an exhaustive list of cards that are on offer, the site is a useful starting point for those in search of something new.
Cardratings.com also released its list of the worst credit cards of the year (some of which are horrific). Unfortunately, the list is specific to the United States. Not to fret, my Canuck friends. We have some pretty mediocre cards here too. Here are a few details on a couple of them that don’t make the grade – and some possible alternatives.
I don’t carry paper money. I have $10 in my pocket right now and, even so, this is a rare occurrence. When I have money on me, I spend more, despite attempting to exert self-control over my purchases. Cash in my pocket just doesn’t work for me. And it’s not like I really need paper money, anyway.
But a couple of days ago, I blogged about a recent article that detailed places you don’t want to use your debit card. I’m guilty of using my card in three of the four places on the list. This got me to thinking about whether I use my debit card more than I should, and if maybe I should switch to using credit more (carrying cash at all times is still out of the question).
I have three credit cards and always make payments a couple of days after a purchase. I never accrue interest, though I do like knowing that I could delay payment on the bulk of a balance if necessary. I also have a couple of perks in place. With my American Express gold card, I collect Air Miles on every purchase over $20. And with my TD VISA, I get a monetary rebate each year based on how much I spend. My third card is more of an emergency card, as my interest rate is extremely low (under one per cent).
That’s not to say that I’m not in the market for another credit card.
Patience can help make a person a good friend, a good parent, and a good worker. And it turns out that it can also contribute to a good credit score, or so says a new study, which has linked impatience and bad credit.
Economists working at the U.S. Federal Reserve’s Center for Behavioral Economics and Decisionmaking recruited 437 low-to-moderate income participants. The goal was to examine the psychological factors that explain why people default on their mortgages. People were asked to fill out questionnaires, which asked that they make choices between smaller immediate rewards and bigger rewards that would arrive later. As part of the study, people also gave researchers access to their credit scores.
The results showed that impatient respondents had lower credit scores. In other words, the people who chose the smaller immediate rewards were deemed impatient. These people were seen as being unable to delay gratification.
Picking up the phone and making a simple call to your credit card company could save you thousands of dollars in interest payments. This news should give hope to those Canadians struggling to pay off their growing credit card balance every month.
Skeptical? Don't be.
In an unscientific experiment, the CBC asked ten random mall shoppers to negotiate with their lenders using a simple script. Six were offered a lower rate and one shopper even cut his rate in half, from 18% to 9%, just by making the call.
What do you have to lose? Asking for a lower rate is free, and since many credit cards charge up to 25% in interest, making a quick phone call could save you some serious cash.
Here's the simple negotiation script:
Imagine that you could pay for a service online without accruing a mountain of fees. Imagine being a retailer and having the ability to take your customer’s money – and keep all of it. Sounds impossible, doesn’t it? Well, now it’s not. Introducing Dwolla.
At only 28 years of age, Ben Milne’s company, Dwolla, has been called one of the top 20 most innovative startups in tech. When Milne was just 18 he started up a speaker manufacturing company. His business was successful, but he found that he was losing some $55,000 in credit card fees each year. Every time a customer paid with their credit card, a percentage of the sale would be given up to the credit card company. “I felt like they were stealing from me – I was getting paid and somebody was taking money out of my pocket,” says Milne. With that, he set out to design a system that would allow the exchange of money, without the hefty fees.
Have you read the The Wealthy Barber? If you're one of over two million Canadians, chances are you've bought, read, or borrowed this mega best selling personal finance book.
It's been 21 years since David Chilton wrote about Roy, the title character, a generous fellow who shares financial lessons with his barber shop clients while trimming tresses. Chilton said he would never write another book, but "after watching Canadians' savings rate plunge, debt levels skyrocket, and investment returns consistently disappoint over the last decade," he wanted to help.
In his new book, The Wealthy Barber Returns, Chilton tackles the trickiest money topics and deals with our most trying financial concerns, all in a fun, witty, and very humorous way. Each chapter features a short story in a conversational narrative on topics that range from credit card debt to personal savings. He tackles the confusing world of life insurance and answers the tough question on where to squirrel away our cash: pay down the mortgage, contribute to an RRSP, save in a TFSA, or help the kids with their education in an RESP.
My youngest child starts college in September and wants his own credit card. I am concerned because his older sister got into trouble with hers. Should we just give him a cash allowance instead?
I view credit cards as fantastic tools that allow young people to build credit ratings and often come with loads of great perks such as travel insurance, air miles and roadside assistance. However, as with any tool, comprehensive training on how to use it is required. These steps will help him use his credit card correctly.
Start with a budget
Let your son develop his own budget for food, gas, clothes, phone bills and other miscellaneous expenses he believes he’ll be met with and discuss ways to manage his budget over the 8 months he’s in school. Establish and agree that making unaffordable purchases outside the budget will result in paying much more for them in the long run as a result of the interest accrued so these are categorically off the table.
Having mulitple credit cards can be a good thing, as long as you use them wisely, and never beyond your means.
 If you have good control over your use of credit, don’t close out those extra cards. Not because doing so will necessarily affect your score adversely, but rather keeping them open and using them strategically will, among other benefits, positively affect your score in the following three ways:
"Your currency is strongest at home" and "buying currency outside a country is always more costly than buying it inside said country." You've heard them both. But which outweighs which?
With the exception of a lengthy remote backpacking trip, I would recommend exchanging enough cash before you take off to pay for the predictable arrival activities like cabs, buses and any airport duties at your destination.
Other than that, I have found that buying local can often lead to more in your pocket than exchanging money here at home in advance. But you should do research on exchange rates as part of your trip planning activities.
Here are a few suggestions:
- Contact your destination hotel and ask what their rates are, if there are any service fees for exchange, and compare their answers to what your bank or local currency exchange office has to offer today.
- Then do the same thing with a currency exchanger near your local hotel, and compare.
- Now call your credit card and see what rates they're using.
You will often find that using your credit cards offers the cheapest and quickest exchange rate of all. Even with a 2.5% conversion fee on top of the exchange rate, American express (for example) still has an overall better rate than some banks (for amounts under $1,000) with the added bonuses of no line ups at the currency exchange, no identification to haul around, it’s automatic, secure and your purchases are likely insured. It's yet another case for the fantastic tools credit cards are in the arsenal of an effective household CFO.
Jeff C. writes: "I've been told that I have a decent credit score of 720. How are credit ratings or scores determined?"
Credit scores are based on a calculation system derived by FICO (Fair Isaac Corporation): a company that developed a rating system to apply to your credit report that predicts how good or how risky you are with your credit.
Scores are between 300 and 850 and just like your high school report card, the higher the number the better your score. There are five categories within the model that have specific weightings:
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