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Financial Management Guidelines
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Making Money Scams
Best Use of Credit Cards
First off, I am going to assume you are not an addictive spender. You should know
that credit cards are not to be used if you cannot afford it. If you have this problem
of spending what you don't have, then you should fix this problem before considering
taking advantage of the benefits of having a credit card. The General rule is, always
make sure you make more money than you spend. Always leave room for investments
and the unexpected and before spending on anything else. If you are spending and
telling yourself you can pay if off later and knowing that you cannot afford it
now, then you are spending too much!
Now, if you don't have that problem, then reap you can reap the rewards of having
a credit card
Benefits of having a credit card:
1. Credit cards allow you to buy now and pay later.
This allows you to accumulate interest on the money you were suppose use while still having the product.
2. Often times, credit cards offer promotional low interest rates that really can't be beaten anywhere.
Credit cards such as ScotiaBank Mastercard and RBC offer promotional interest rate
for borrowing at 1.99%. That interest is so low that you can borrow the money and
invest in it in a high interest saving account and you'll be making the difference.
Although I encourage to take advantage of those promotional interest, be very careful
that you must pay it off on time. Missing a day could result in 20% interest cost
that could last for 21 days! Be organize if you are going to borrow from a promotional
credit card rate.
Also, do not spend and borrow using the same card. Sometimes, the spending money
is charged interest on the day you owe money. Other times, that portion of the spending
amount becomes charged interest at the high rate of 20%. Regardless to keep things
simply, only borrow from credit cards that you do not intend to spend with.
3. Credit cards give rewards that are actually really very good.
So which credit card give the best rewards?
1. Ultramar Mastercard from National Bank of Canada
If you spend more than $9000 up to a maximum of $20 000 per year, this credit card
will give you a
FULL
1.25% cash back.
2. CitiBank Enriched Mastercard
If you spend more than $20 000 per year, add this card to your annual spending habits
and you get an additional 1% cash back. If you spend less than $9 000 per year,
than you do not need the Ultramar because they do not give a better cash back for
that amount. Simply stick with the Citibank Enriched Mastercard in this case.
3. Petro-Point Mastercard
Petro-point mastercard offers you 2 cents off Petro gas. Use this card on
Petro gas only. Their petro points is not so good that you would want to use it
in other cases. In other cases, the cash-back cards indicated above is better.
Note: While we are on the topic of using credit cards in gas stations, always pay
at the pumps. Do not pay gas at the counter. Credit cards theives are known to be
stealing from gas counters.
4. ScotiaBank Mastercard and RBC VISA
I keep these two cards for borrowing purposes only. They often give promotional
interest rate at 1.99% that can't be beat anywhere, not even credit line can offer
that. They don't offer much value in rewards, but when you are late in payments,
they actually less sneaky than the other credit card companies.
Another thing to know is that Canadian Bank credit cards charge less interest than
American once. Most times you won't even know the high cost because the calculations
to the interest can be so complicated. What I do notice is that if you are a day
late for CitiBank Mastercard, an American Credit Card company, they will bill you
for the full billing cycle, usually 21 days. This means if you pay in full one day
late, you will be billed for the interest rate for the full billing cycle! If are
one day late for paying the RBC Visa, my experience is that they will forgive you
and not charge you at all.
Be very careful when applying for credit cards. By applying, they will check your
credit raitng. Simply checking your credit rating will cause your credit rating
to go down. Also by cancelling credit cards, your credit rating will go down. I
am not going to name names, but some credit card companies are very agressive and
once you give them your personal information, they will harass you for life, even
if you move and/or cancel your credit card. Do some research on the company before
giving your personal information away. Never tell anyone your Social Insurance Number!
One thing I don't like about these credit card companies is that they tend to sell
my identity to other companies. I have been getting telemarketing calls from Manual
Life because Citibank sold my identity to them. Every month, Manual Life telemartketers
call my cell phone to sell insurance. Every month, I tell them I don't want any
and they still call me!
Never buy anything over the phone. Enough said.
