As a proud resident of Okotoks who works with the people of my city and close neighbours Calgary and High River, I am as overwhelmed and saddened as you by the magnitude of the devastation to our communities. For all those affected by the flooding, my thoughts are with you, and I hope that recovery goes smoothly and everything is back to normal as soon as possible.
I couldn’t be prouder of how well our province and all of its residents have reacted through this disaster, and want to say thank you to our rescue workers, volunteers and all those who have been working around the clock to get our neighbours back into their homes.
Take care everyone!
This week the Mortgages By Candice blog post focuses on how to control your credit card debt. How many credit card offers did you get in the mail last week? Were you tempted by the promise of low rates, no annual fees, or other special deals? If you said “yes” to any of these, you aren’t alone: Calgarians and Albertans are using credit cards more than ever before, and at least one-third of us don’t pay off our balances regularly.
Credit cards might seem like easy money and a great convenience, but they can put your financial future at serious risk. As a Calgary and area mortgage broker who helps homebuyers plan for their future every day, here are a few secrets that can keep you from surrendering to the temptation of overwhelming debt.
Think Small. Read the Fine Print.
Credit card companies aren’t trying to save trees. The print on credit card offers is tiny so you won’t read it! While 7.5 per cent on a credit card might sound like a deal, make sure that after six months or a year the introductory rate won’t expire and you end up paying 19 per cent. Companies are required to show a summary of charges on the application form. Read it first, so you know the facts.
Many companies include language that your rate can change at any time as long as they give you notice, so it is extremely important to read any notifications they send you. Being late with a payment or having too much outstanding debt could trigger a rate increase. Credit card companies manage their risks carefully by tracking your credit usage and history, and they will take steps to protect themselves if you appear overextended
Learn the Language of Credit Cards
Credit card offers are filled with language intended to keep you from thinking about the big picture. The real story is told in the fine print. That information is there to help you make an informed decision. Understanding a few terms can keep you out of trouble with most cards.
- Amount Due – Many cards will only tell you the minimum payment rather than the total due. If you pay only the minimum each month, you will be in debt for years.
- Annual Percentage Rate (APR) – Know your APR. Some offers only show the monthly rate to make it seem lower.
- Due Date – Your credit card company must receive your payment by this date.
- Finance Charge – The interest you have to pay on the remaining balance.
- Grace Period – As of September 1, 2010, companies are required to send out statements 21 days before the due date. No fees are applied before the grace period ends.
- Late Fee – A charge you will owe if your payment is not received by the due date. Paying late can impact your credit score.
- Minimum Monthly Payment – The smallest payment you can make without being considered delinquent.
- Monthly Periodic Rate – Equal to 1/12th of your APR, this is the rate interest is assessed during a billing cycle.
- New Balance – The amount owed after all credits and new charges have been posted to your account.
- Previous Balance – This is the amount owed for the last month after charges and payments were taken into account.
Read carefully for any fees. Some companies charge transaction fees, cash advance fees, over-limit fees, or an annual fee simply for the privilege of having the card. You might even have to pay if your card needs to be replaced after being lost or stolen.
Calgary mortgages are usually for 25 years. Vehicle loans are often for five. At the end of that time you know you will own your home or car. Credit cards have no term. New credit card rules require companies to show how long it will take to pay off your balance if you only make minimum payments. Look closely. If you are only making minimum payments, your balance may not be paid off for 30 years or more – and that’s only if you don’t add more to it! If you only make the minimum payment, almost all of it will go to interest. With the help of a mortgage broker, you could develop a plan to pay off your debt in far less time while also saving on interest. Or perhaps debt consolidation is the right option for you.
These credit card secrets can help you keep avoid the pitfalls of debt, but without a plan, how do you know where you want to be? As an experienced Calgary mortgage broker, I can help you develop a vision for your financial future. Whether you need help managing your existing debt or learning how to put your mortgage to work for you, I can help you achieve financial freedom for your family’s future.