Making the Most of Your Credit Card

I know a lot of people absolutely hate the idea of credit cards and yes most often they aren't a good thing for people who are careless with their spending habits. For those that are responsible when it comes to credit card's there are some great ways to take advantage of the perks that come with having one.


One rule that I like to follow is don't make purchases just so you can get the rewards. Charge things like your rogers bill that are necessary and you have the cash to pay them off. You can take advantage of the points for these types of purchases instead of paying for them with cash/interact etc.

Master Card-Priceless Toronto
Unfortunately or fortunately for some the Mastercard priceless program is available in Toronto only. All Mastercard holders can take advantage of these deals including discounted premium Leafs tickets, Raptors tickets, savings at restaurants, stores and many more. Check out the site to take advantage of some of these deals.

BMO Airmiles Mastercards
Of course I have a bit of a bias towards Airmiles Mastercards but there are some great ways to accumulate additional points. Check out airmilesshops.ca , login with your airmiles card and double dip on points by using Airmiles shops promo's and using your Mastercard to pay. I'm currently saving miles up for a flight to California or Europe.

Other Loyalty Programs (these are for zero annual fee cards)
TD Canada Trust-TD Rewards
RBC- Shoppers Optimum points or RBC rewards points
Scotiabank-Scene points
BMO-Airmiles
CIBC-Petropoints

Discounts
Certain credit cards, including the card that I currently have can give you discounts through the SPC discount program. Check out the website for your credit card to see if there are any discounts that you qualify for.

Travel/Car Rental Insurance
Most Visa/Mastercard cardholders have travel insurance built into their credit cards or can easily purchase are affordable insurance options for travel or car rentals. Travel agencies and car rental companies often try to gouge you when it comes to insurance options. Call your credit card company or check out their website to see what is offered in terms of insurance..or what you already have.
 
If you don't have a credit card and want to check out some of the options for students view one of my posts here.

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Credit Cards 101

The topic of credit cards is often a bit sketchy at times. Some of you're parents may not want you to get one and depending on the type of spender you are, that may be a good thing. Not to sound like your parent, but if you spend tons of money carelessly like you're a hip hop star, please don't get a credit card.


Always be cautious when signing up for a credit card, think it through and determine what your needs are.


There are a few things that I live by when it comes to using my credit card.

• Whatever you purchase on your credit card, you should have the money to pay that balance back by the time your payment is required at the end of each month
• Don't pay the minimum payment, pay your whole bill if possible. If not you will continuously get charged interest at rates that hover around 18-19%
• Don't miss a payment!
• Since I have the BMO Mastercard I tend to make purchases with my Mastercard even though I have the money in my bank account just so I can collect points, I then am able to pay my Mastercard bill using my credit card with no problems (since I already had the money).
• By paying your balance on time and in full you have the ability to build excellent credit rating which will help in the future when taking out a mortgage and other dealings with the bank.
• Please, don't take your credit card out with you when you go downtown, I've heard some horror stories.

Click here to view the Cheap Students credit card chart.

Some more information if you just LOVE reading.


8 Important Words to Remember
This article was found at gettingsmarteraboutmoney.ca 

1. Annual fee – If your credit card charges an annual fee, ask the lender if they’ll waive it. They may be willing to do this to keep your business.
2. Balance due – Your statement will tell you what you owe and when it’s due. The amount due can include any unpaid balance you owe from a previous bill, as well as any new charges, interest, late fees or annual fees.
3. Credit limit – This is the amount you can borrow using your card. The lender can’t change this limit without letting you know.
4. Finance charges – If you don't pay your bill on time, these charges can include late fees plus interest. You’ll likely pay a higher rate of interest on any cash you borrow using your card and a lower rate on money you borrow for purchases. Your credit card company treats these as two different kinds of balances.
5. Grace period – This is the time you have to pay off the balance you owe each month before you have to pay interest. In most cases, the grace period starts on the billing date and ends a certain number of days after. Under Canadian rules, if you pay off your balance in full each month, your lender must give you a grace period of at least 21 days on all new purchases. If you don’t, you’ll pay interest on the full amount you owe.
6. Annual percentage rate (APR) – This includes all loan service costs and interest. It may be higher than the interest rate you see in the loan contract.
7. Introductory rate – This is a special offer that gives you a temporary, lower APR. In most cases, the offer lasts about 6 months. Then it goes up to the normal rate for your type of card. Your lender must tell you in advance when interest rates are going to increase – even if the information is part of your contract.
8. Minimum monthly payment – Most cards ask only for a minimum payment each month. This is often 5% of the current balance or $10, whichever is more. Your monthly statement will tell you how long it will take to fully repay what you owe if you only make the minimum payment each month. Use this calculator to see how long it will take to pay off your card if you make the minimum monthly payment

What is a Credit Score?

Your credit score is a judgment about your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers.

There are many different ways to work out credit scores. The credit-reporting agencies Equifax and TransUnion use a scale from 300 to 900. High scores on this scale are good. The higher your score, the lower the risk for the lender. Lenders may also have their own ways of arriving at credit scores. In addition, lenders must decide on the lowest score you can have and still borrow money from them. They can also use your score to set the interest rate you will pay.

What is a Credit Rating?

North American Standard Account Ratings

Code	Translation
Other rating indicators that might be found on a report are "I" for installment credit or "O" for open credit line. Source: Equifax Canada
R0	Too new to rate; approved but not used.
R1	Pays (or paid) within 30 days of payment due date or not over one payment past due.
R2	Pays (or paid) in more than 30 days from payment due date, but not more than 60 days, or not more than two payments past due.
R3	Pays (or paid) in more than 60 days from payment due date, but not more than 90 days, or not more than three payments past due.
R4	Pays (or paid) in more than 90 days from payment due date, but not more than 120 days, or four payments past due Pays (or paid) in more than 90 days from payment due date, but not more than 120 days, or four payments past due.
R5	Account is at least 120 days overdue, but is not yet rated "9."
R6	This rating does not exist.
R7	Making regular payments through a special arrangement to settle your debts.
R8	Repossession (voluntary or involuntary return of merchandise).
R9	Bad debt; placed for collection; moved without giving a new address or bankruptcy.

If you just read all of this and you were like..please stop this madness. Read this summary instead.

• A credit score is a score given to you based on how safe it would be to lend you money, low is bad, high is good
• A credit rating is based on how quickly you pay for bills (credit cards, hydro, cell phone etc.), the more reliable your payments are the better. Do you pay your bills on time?

Visa vs. Mastercard
What do these 2 brands mean? 
Simply put they are the service providers that allow your credit card transactions to take place. Both are widely accepted around the world and at major retailers, if they don't take your credit card, you're probably better just using your debit card/cash anyways.


Mastercard/Visa Availability

Mastercard	Visa
BMO	RBC
RBC	CIBC
Canadian Western Bank	Citzens Bank of Canada
	Laurentian Bank of Canada
	Scotia Bank
	TD Canada Trust

Add-on's

When applying for a credit card they may try to swindle you into buying extra add-on's.

Some examples of these are;

-Extended warranty
-Balance protection 
Often you don't need these add on's as a student. If you are really considering these add on's do some research online and see if it's right for you, if they aren't simply tell them no thank you, despite how persistent they can be.


Sources:
http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02179.html 

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