RATESDOTCA Lists Ways Canadians Can Save On Credit Card Debt
TORONTO, December 13, 2011… With the holiday season in full swing, and more and more consumers pulling out plastic to fund their celebrations, RATESDOTCA has created their five top credit card tips to help Canadians save money before, during and after the holidays.
1) Get old debts under control
Are you still struggling to pay off LAST year’s holiday gifts, let alone this year’s? If you have a large outstanding balance on your credit card, make a point of getting it under control. Look into transferring the balance to a card that offers a low introductory rate on balance transfers, i.e. a 0% balance transfer credit card. This means that more of your payments will go towards paying off the balance and not just the interest.
2) NEVER just pay the minimum
If you have $1,000 owing on a credit card and only pay the minimum amount each month, it will take you almost 10 years to pay it off and cost you an extra $1,056.70 in interest – yikes! Make sure you’re paying more than the minimum interest owing each month. And, if you regularly forget to pay the balance on your credit cards, set up an automatic payment from your bank account to your credit card, so you don’t get stuck with extra interest charges.
3) Look at your bill
You may be happy shopping for your niece or father-in-law, but you’re probably not interested in buying a gift for the guy behind you in line at the store, or a scam artist on their computer overseas. Regularly view your credit card statement online to make sure you actually bought what you’re being charged for. Christmas is a busy season and fraudsters are on the move. Also, pay attention to any admin or extra fees such as credit card insurance. Don’t get caught paying for something that you don’t use or want.
4) Don’t use your credit card to take out cash
Interest charged on cash advances is typically in the area of 19% - 22%. If you need extra cash, look into a line of credit or a small loan through your bank instead. If you have a good credit history, interest rates on this type of loan can be as low as Prime + 1% (Prime currently sits at 3% for most banks).
5) Ask for a lower interest rate
You don’t get what you don’t ask for. If you’ve built up a good credit history with your current provider, there is no harm in calling the company to ask for a lower interest rate, especially if you intend to put more on your card this month than usual. You may need to threaten to cancel the card and take your business to another low interest credit card provider before they take action, but it may be worth it to lower your interest rate.
“The holiday season is an important time to look at your credit card debt and spending habits”, says Kelvin Mangaroo, President of RATESDOTCA. “But really it’s about putting in place good credit card practices that will help you save money year-round.”