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If you have
more than one loan, pay off the ones with the higher interest rates
first. |
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Ask the bank
to consolidate the balances owing on credit cards and debt into a
single loan that could reduce interest costs. |
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Credit can
be useful but care must be taken to have it work for you, not against
you. |
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Debt that
is not tax deductible should by disposed of as soon as possible. |
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The longer
you take to repay a loan, the more interest you will pay. |
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You might
not use your credit card as much if you start believing that you have
to pay off your entire balance at the end of each month. |
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Pay down
debt effectively by starting with balances having the highest interest
charges, such as credit cards. |
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A good way
to help to reduce what you pay on your credit card is to search for
a card with a lower interest rate. Many financial institutions now
offer at least one of these types of cards. They offer a lower interest
rate in place of perks such as an air miles type of plan that normally
accompanies a card with a higher interest rate. |
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Try using
cash instead of credit to pay for major purchases that cost less than
$1,000. |
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When shopping
for groceries, make a list of the items you need and attempt to stick
to it. Also, refrain from paying for weekly groceries and meals at
restaurants with credit. |
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Using the
convenience of a credit card as a substitute for borrowing a fixed
amount of money is a mistake that many people make. It is important
to keep in mind that a credit card is not a financing vehicle. The
difference in interest can be as high as 300% when comparing
using a credit card to getting a loan. |
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Beware of
the marketing professionals that wait outside of department stores
in malls and try to entice shoppers to sign on for one of their credit
accounts by offering free gifts. In most cases, the cards they offer
come with an incredibly high interest rate which more than pays for
any free gifts that they offer in their sign-up promotion. These high
interest credit cards always end up costing much more than they are
worth in the long run. |
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Remember
that when you take a cash advance on your credit card, the interest
starts accumulating immediately and not on the due date of your credit
card bill. Use credit only when it fits into your long-range financial
plans. |
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If your debt
begins to increase beyond what you originally planned, stop using
credit and begin a structured repayment plan. |
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It is sometimes
to your advantage to consolidate two or more outstanding loans, as
you may be able to negotiate a lower interest rate. |
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Consider
consolidating debts into a repayment plan using a single payment vehicle
by taking advantage of a low-interest line of credit or home equity
loan. When repaying your educational loans, try to make as large a
payment as possible. |
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Introduce
the concept of saving to children at an early age. The younger a child
is when they learn about the value of money, the better equipped they
will be at handling it. Use your savings account as a temporary place
for your money, not as an investment. |
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A shorter
loan period will save you money in the long run by reducing the interest
paid over the life of the loan. |
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Remember,
your student loans will show up on your credit report. Defaulting
on your student loans can have serious consequences for your ability
to get credit for purchasing a home. |
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Only charge
to your credit cards what you can pay off in full when the bill comes. |
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Use a no-fee
credit card and save the annual fee that some companies charge. |
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Consider
refinancing credit card debt with a lower interest rate home equity
loan. |
Learning Centre -
Credit
