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Credit card rules: How to wean yourself off credit card debt.

As seen in BC New Home Guide.

The Canadian government implemented credit card regulations that increases transparency and protects consumers. Here are some of the regulations:

  • Credit contracts and application forms must have a “summary box” that clearly explains interest rates, fees, and how long it would take to fully repay a balance if only minimum monthly payments are made.
  • Banks must give advance disclosure of interest rate increases, even if this information is already in the credit contract.
  • You must give your consent before your credit limit can be increased.
  • If you transfer your balance to a lower-interest card, your payments now have to be allocated in your favour.
  • There’s now a limit on certain debt collection practices used by financial institutions.
  • Banks can’t charge over-the-limit fees resulting from holds placed by merchants.
  • You have a minimum 21-day interest-free grace period on all new purchases if you pay your outstanding balance in full by the due date.

Eliminate-credit-card-debt1While critics don’t think these regulations go far enough to protect the consumer, at least the government is trying to make an effort to help consumers avoid predatory lending practices. And that’s a good thing.

However, an even better strategy is to start weaning yourself off of credit card debt. Unlike taking out a mortgage to buy a home or revenue property, buying stuff with your credit card at high interest rates doesn’t yield any returns – it simply gets you deeper in debt.

The following are some tips to help you use your credit card responsibly so you don’t pay unnecessary charges and get in trouble with credit card debt:

  • When you pay for something with a credit card, you are taking out a loan and you have to pay it back.
  • Pay the balance in full each month
  • If you can’t pay it in full, pay as much as you can
  • Don’t make only the minimum payment
  • If you always carry a balance, get a low rate card
  • Pay a few days before the due date
  • If you have a line of credit, transfer the balance to your line of credit with a lower rate. The goal is to pay down your debt and not go further into debt.

Put yourself on a budget, take a part-time job (or start a home business) and eventually get your credit cards paid off. You will be astonished how much extra money you will have to invest in assets that actually appreciate in value and put cash in your pocket!

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Free presentation on Financial Literacy for teens and young adults – May 25th from 10 am to noon

We are hosting a free presentation on Saturday, May 25th from 10 am to noon on Financial Literacy for teens and young adults (great for teens of 15 years of age and older including adults).

As you know you don’t have to look very far to read an article in the newspapers or watch a segment in the news talking about the lack of education when it comes to teaching students the basics about Financial Literacy.

While the topic of Financial Literacy can be dry, dull and boring – enRICHed ACADEMY was created to be an incredibly powerful program that will both educate and entertain. This presentation will provide some good information about the understanding of money management and investing. This program was featured and endorsed by Dragon’s Den.

We will be covering the following topics:

  • Understanding how money works and where most North Americans are financially
  • Money myths and misconceptions
  • Why some people, including high earners, never get around to saving money & how to avoid the pitfall
  • The power of saving 10% of what you can earn and more
  • The magic behind compounding interest and how it works
  • How to systemize your savings and where to put your money for maximum wealth building
  • Understanding how the stock market works and how to get started investing
  • Understanding how to purchase your first rental property
  • How credit cards, credit score and credit card interest work
  • What happens if you only make minimum payments or neglect to pay your credit card on time
  • 6 steps to having an A+ credit score
  • What “Good Debt” and “Bad Debt” are and what makes the difference

Details:

Saturday, May 25th from 10 am to noon

Pinetree Community Centre, Room 8 located at 1260 Pinetree Way, Coquitlam

(next to the Douglas College, David Lam Campus)

Please register via:

Email: aaragon@dominionlending.ca or jaragon@dominionlending.ca

Call: 778.893.0525 or 604.931.9000

It would be great if you want to join us and please feel free to pass on to anyone that you think would enjoy attending this unique event.

Register today s space is limited!