Low rate APR offers can be a huge trap, or a huge boon to you. Here’s how to max the potential in those deals, without getting stuck.
Know What You’re Getting
To encourage new credit card sign-ups, credit card companies often entice potential customers with low introductory rates. Sometimes referred to as “teaser-rates”, these low rate offers can actually be a good deal IF you plan ahead and use them wisely. The majority of 0% or low rate introductory offers are for balance transfers. However, some cards offer the same intro rates for “access cheques”. These are essentially blank cheques available for use on any purchase. You can even write in your own name and deposit them into your bank account. Sound dangerous? When using these cheques, the credit card company will usually treat them as “cash-like” transactions which start accruing interest immediately – and often at lofty rates. However with the right plan (and introductory offer), these cheques can be used effectively. Just make sure you understand the terms of the offer.
According to a leading market study conducted by Ipsos Reid, eleven percent of Canadians (roughly one in ten) say that they don’t discuss financial problems with their spouse. In the same study, a significant portion of married Canadians (and Canadians in common-low relationships) indicated that they have relationship issues that directly stem from money problems.
Financial considerations influence nearly every aspect of our everyday lives — from where and how we work, to where we take our vacations, what we eat, and even how far we pursue our educations. That’s why it’s important to openly discuss money with not only your spouse, but also your children.
Given the economic climate, it’s not surprising that many Canadians are taking more control of their household debt. What’s more, statistics indicate that they’re using credit cards more responsibly by paying off their balances more quickly – and often within the same billing cycle.
According to a Royal Bank of Canada report, during the year ending in December 2013, personal debt rose by only 3.9 percent, representing the slowest yearly growth since 1995. It’s true that the debt-to-disposable-income ratio for Canadians escalated to a record-breaking 163.65% during the third quarter of 2013, but according to industry analysts from Fitch Ratings, credit cards have not played an overall part in this leveraging trend. The Fitch report goes on to say that, while there has been a growth in card spending volume, Canadians are tending to pay off their entire balances every month.
Double Double addicts around the nation are shaking with delight, but this time it’s not the caffeine causing the jitters. Instead, it’s exciting news announced today by CIBC and one of the largest publicly-traded restaurant chains in North America – Tim Hortons. Both companies announced they will be launching a co-branded credit card, which will offer loyalty rewards to Timmie Fans and CIBC clients.
Generation X and Y have financial expectations they aren’t supporting with their actions, according to a recent report by BMO Wealth Institute. Other studies have been hinting at this problem for awhile, but now we have the figures that show why – and how – consumers in these groups will have to change their ways if they want to fulfill their dreams of homeownership, funding their children’s college educations and living comfortably in the retirement years.
Do you have a love or hate relationship with your credit card? Credit cards are quite personal and we all have a certain relationship with them. Your relationship with your credit card should be a pleasant one and it should be a two-way street. When used responsibly, your card should return the favor with perks and rewards. Just like any personal relationship, you should be happy with your current credit card and avoid those that may be one-sided. If you don’t feel a sense of attachment to your card, it may be time to find a new one…
Why You Should Love Your Credit Card