The Approval Centre

One of the easiest ways to establish and build your credit score is with a credit card. As long as you don’t exceed your credit limit, pay your bill each month, and stay within your budget, you’re on the right track to financial stability.

But what if you’re new to the world of credit? How do you know if you’re using your card responsibly?

We’ve come up with a list of some of the most common questions that new credit users have to help you get familiar with your card.

What is a Minimum Payment?

At the end of each billing cycle, you receive a statement that lists how much debt you’ve accrued over the period. It also lists a minimum payment. The minimum payment is the lowest amount of your bill that you can pay back to your bank. If you pay less than that amount, then your payment is considered late.

Let’s say your statement says you owe $100.00 and your minimum payment is $10.00. Even though you still owe the bank the full $100.00 eventually, so long as you pay at least $10.00 for that month your account won’t become delinquent (which occurs when you miss a payment by more than 30 days)

What is an Interest Rate?

There are, of course, major downsides to only making the minimum payment on your credit card and they come in the form of increased debt thanks to interest. Interest is additional money your bank tacks on to how you much you owe according to how long you take to pay back the money you’ve borrowed from them in full. The interest that accrues on your account is determined by your interest rate. The standard interest rate for most Canadian credit card holders in good standing is 19.9%. This means that even if you make the minimum $10.00 payment on your $100.00 bill, you’ll still be charged an extra 19.9% for the remaining $90.00 you have yet to pay. The longer you keep on making only the minimum payments, the more the interest increases and the larger your debt grows.

This is why you should avoid making only the minimum payments unless you have absolutely no other choice.

No matter what bank you’re with, most credit and debit cards have a couple of things in common – they all have a unique card number, a 3 digit card security code on the back, a blank space for the cardholder’s signature, and two phone numbers – a customer service number you can call locally and another international number to call your bank when you’re out of the country.

So when should you call your bank? Do you really need to wait until you’re dealing with an emergency or are there other occasions that warrant you giving them a call?

If you Lose your Card

The moment that you notice your card is missing, you absolutely must call your bank to report it lost or stolen. In the case of a debit card, anyone who finds (or who has taken your card) will have instant access to your money (especially if they tap the card at checkout -they’ll be able to make purchases under $100.00 without your PIN). The same applies for your credit card, but as long as you report your card missing quickly enough, you won’t be on the hook for any purchases you didn’t make.

If You Notice Suspicious Activity on Your Account

Notice a charge on your statement that you’re positive you’re not responsible for? Is your balance much higher or much lower than it’s supposed to be? Call your bank. Do you suspect someone’s opened up a second account in your name? Definitely call you bank.

If you even suspect that your account has been compromised, you should call the number on the back of your card. It’s better to be safe than sorry where your money is concerned.

Going back to school is expensive no matter what grade or level of education you’re at but nothing compares to the costs associated with attending University or College. As September approaches, it’s a good time to start planning and budgeting for the year ahead.

Here are some of our tips to help you save money when the new semester rolls around:

Cook (or Learn How if you Don’t Already Know)

Students are constantly busy. Finding time to eat (let alone to prepare) a proper meal can be difficult to manage in between going to class, studying and trying to fit in a social life. So while it’s understandable why so many students opt for take out over a home cooked meal, it’s absolutely brutal on the wallet in the long term.

That doesn’t mean you should never get fast food. It just means you need to strike a balance. Give yourself one day a week to buy takeout. Whether that means swinging by the McDonald’s drive thru on the way home or stopping at a sit down restaurant with friends, it’s important not to totally deprive yourself.

That being said, you should do your best to make all your own meals during the rest of the week. They don’t have to be fancy, either. There’s nothing wrong with an egg salad sandwich. The more often you’re able to cook your own food, the cheaper it will be for you. Depending on how much food you cook, you’ll also have leftovers for the next day (so you get two meals in one).

It can be tough to figure out if you’re finally ready to take the plunge and buy your own home or if you should keep renting. Here are a few questions to ask yourself before making any decisions.

Are you planning on staying put for at least 5 years?

1.Yes 2.No 3.Unsure

Will you be able to comfortably afford your mortgage payments as well as any other associated costs (taxes, property upkeep and home maintenance, utilities, insurance etc)?

1.Yes 2.No 3.Unsure

Are you financially stable and can you say with confidence that you’re unlikely to be jobless/suffer a significant pay cut in the next few years?

1.Yes 2.No 3.Unsure

Can you actually afford the type of home you want in the location that you want?

1.Yes 2.No 3.Unsure

Going on vacation is rarely cheap. Between the costs for hotels, flights, car rentals, attractions, and meals, going away can really set you back money-wise.

But the cost of going away shouldn’t deter you from giving yourself (and your family) a much needed break! Here are some cost effective alternatives to a traditional vacation:

Staycation

While the term itself may not be particularly inventive (it’s a combination of the words ‘stay’ and ‘vacation’), staycations have rapidly become all the rage. In essence, a staycation occurs when you act like a tourist in your own city and go explore the places and attractions you don’t normally bother with or haven’t been to in years. Go to museums, amusement parks, aquariums, and any other attractions you’re likely to see on your city’s tourism website.

The key is to plan in advance; check websites like groupon for deals and discounts and don’t forget to check the websites of the attractions you plan to visit to see if there’s a discount for buying online or booking your tickets early.

Look for Last Minute Deals on Travel Sites

Sometimes you can find some absolutely fantastic last minute getaways for a really reasonable price. The key with last minute deals is to make sure you’re as prepared as you can possibly be beforehand. Check that your passport hasn’t expired and that you’re able to book the time off work on short notice.

Some people assume that as long as they’re making at least the minimum payment on their credit card statement each month that they’re being financially responsible.

That’s just the tip of the iceberg, though; There are a number of other important monetary factors that need to be taken into consideration too. Take our quick quiz to get an idea of just how on top of your financial situation you really are:

A) Do you always carry a balance on one or more of your credit cards?

No Some of the time Most of the time Yes

B) Do you have emergency money set aside?

Yes, I have enough set aside to feel secure should the worst happen I’m actively saving up my emergency fund I have a little bit set aside I have nothing set aside

C) Are you always on time with your loan payments (student loan, auto loan, mortgage, etc)?

Yes Most of the time Some of the time Rarely

Your credit score is one of the most important parts of your financial history; it’s your key to getting access to loans, mortgages and every other type of credit imaginable. As with any sensitive piece of information, it’s only natural to want to know how many people have access to it.

Aside from you, the credit bureaus who gather information on your borrowing/repayment habits and compile it together are the ones who always have access to your credit report and history.

In Canada, the two credit bureaus are Equifax and TransUnion.

What Kind of Personal Information do they Collect?

Equifax and TransUnion collect the information necessary to build your file and create an accurate picture of your credit habits and behaviour. This includes your name, your current and former address, your date of birth, your marital status, your social insurance number, your current and former employer, your paying habits, your outstanding debt obligations, your estimated income, your cost of living obligations, as well as any payment information/identifying information and any information provided to them on employment applications, correspondence, or any other communications.

Where Do They Get this Information From?

The credit bureaus obtain your information from a variety of sources. Credit grantors (banks, credit unions, car dealerships, student loan services etc), Collection agencies and certain government agencies and legal suppliers. Equifax and TransUnion will also collect information directly from you when you request a copy of your credit report. In order to protect your privacy, the credit bureaus limit how many employees are allowed access to your personal information (restricted on a need-to-know basis).

No one consciously decides to accrue massive amounts of debt, but negligent money habits and irresponsible spending can lead you down a slippery slope of relying on borrowed money to stay afloat.

If you’re worried that your current money habits might be setting you up to fail later on, you should read our list of bad spending habits and do your best to correct them as quickly as possible.

Don’t Get Complacent with Your Credit Cards:

It’s incredibly easy to get access to money that isn’t actually yours. The key is to remember that you’re merely borrowing it from someone else and that you will have to pay it back (usually with interest).

The second you start treating your credit card like it’s free money, you lose perspective of how much money you actually have versus how much you’ve borrowed.

Don’t Rely on Overdraft to Save you:

Overdraft can be an excellent safety net, but that’s all it should be – an extra measure of security to protect you should you spend more than you actually have available in your account.

If you’re dipping into overdraft every month then you need to reevaluate your spending habits because chances are you’re spending beyond your means. This can set a dangerous precedent and is one of the easiest ways you can sink your finances.

Don’t Spend Money you haven’t Earned Yet:

If you don’t know where the money will come from to pay for whatever you’re about to buy – do not buy it. Spending money you haven’t actually earned yet (or that you can’t guarantee will be given to you in a timely manner) can lead to a cycle of debt in which you’re always looking backwards and trying to get caught up on old debt.

Having a credit card as an adult is pretty much a necessity; even if you’re determined to avoid debt at any cost, chances are you’ll need a card at some point (even if it’s just to book a hotel or rent a car when you’re traveling).

Whether you’re new to the world of credit or just a bit rusty with the do’s and don’ts, here are some credit card faux pas you should do your best to avoid.

Don’t Choose a PIN that’s Easy to Guess

Choosing an obvious PIN isn’t just a faux pas, it’s a huge safety risk. If your card ever ends up in the wrong hands, the last thing you want is for the the person who’s taken it to be able to guess your PIN easily and have instant access to all of your money.

Avoid choosing anything with an obvious link to you or the people closest to you (that includes birthdays, license plate numbers, addresses, etc.) and, for added safety, choose a different PIN for your debit and credit cards.

Be Very Careful about Who you Lend your Card to

In general, it’s best not to lend your credit card out to anyone, but that’s not exactly practical. Your best bet is to restrict it only to people who you are absolutely certain will not violate your trust and who won’t do anything unsafe with your card.

In case something does go wrong (they lose your card, they make a purchase with a vendor who isn’t verified), you’ll need to ensure the person you lent your card to can be held accountable and will do everything they can to help you right the situation.

Don’t Post Pictures of your Credit Card Online/to Social Media

This might seem obvious but you’d be shocked by the number of people who post pictures containing personal information online without a second thought. You don’t want to be one of these people.

Still not convinced? Producer DJ Khaled allegedly lost $80,000 in seconds after showing off his AMEX Black card in a snapchat video.

It’s generally a good idea to order a free copy of your credit report once a year in order to check that all of the information is accurate. Having a few minor errors here and there might not seem like a big deal, but even the smallest dip in your credit score can affect how easily you’re able to obtain a bank loan. To make matters worse, having a credit score that’s lower than it actually should be could result in you having to pay significantly more in interest.

Read on to see what you should look for in your credit report once you’ve received it.

Overview

So what information is actually in your credit report? Aside from the basics (Name, Age, Address), your credit report also lists any and all debt under your name – including consumer proposals and bankruptcies – as well as your paying habits (if you’re late, if you only make the minimum payments, if you’re always on time, etc).

What’s Not Listed in your Credit Report?

If your bankruptcy was discharged 7 years ago or more, then it will not appear on your credit report. This does not apply if you have filed for bankruptcy more than once. A consumer proposal will be removed from your report three years after the date in which the proposal was satisfied or 6 years after the date when you defaulted on the account.

The same applies to any criminal charges that were dropped, any criminal convictions that occurred 7 or more years ago, and the payment (or non payment) for any taxes or fines that occurred at least 7 years ago.

One of the most important things you can do to protect yourself financially is choosing a good PIN. Your 4 digit PIN (Personal Identification Number) grants unlimited access to your bank account and the consequences can be devastating should that information fall into the wrong hands.

Here are some tips on how to choose the safest, most secure PIN and how to protect it (and by extension – yourself).

Have a Different PIN for Every Card

This might sound tedious, but your safest option is to have a different 4 digit PIN associated with all of your cards (debit and credit). While it’s certainly easier to use the same PIN across all of your accounts, it also increases your vulnerability to theft.

If your wallet is lost or stolen and the thief manages to figure out your PIN for one account, you’ve just given them the tools they need to tap into all of your other accounts as well. Instead of one of your cards being breached, suddenly all of your bank accounts are accessible.

Don’t Write your PIN Down or Keep it Somewhere you’re Likely to Lose It

The worst thing you can do is write your PIN down on a sheet of paper in your wallet or to save it as a memo on your phone. You’ve made it as easy as possible for potential thieves to access your accounts. If it’s too difficult for you to memorize the PIN number the bank gave you then make sure you change it to something that you’ll be able to remember without writing it down anywhere.

Choose Your PIN Wisely

Do not choose a PIN that’s easy for other people to guess. Stay away from things like birthdays (either your own or a family member’s or spouse’s), phone numbers, license plate numbers, or addresses. If your wallet is ever stolen, you want to make sure that thieves can’t easily guess your PIN based on the information inside.

There is no set age by which children mature which can make it difficult for parents to gauge when their kids are ready to take on more financial responsibility.  On the surface it may not seem like there’s a huge difference between giving your child cash and giving them a debit card, but for most kids, getting their very own piece of plastic is the first step into the adult world. It comes with restrictions, limits, and rules that are imposed by a bank rather than by you.

If you’re seriously considering moving your child from cash to debit, here are a few questions to ask yourself (and them).

Do they understand how Debit works?

Make sure your child really comprehends that their debit card isn’t a magical source of never ending funds. Just like with cash, they’ll have a set total in their account and won’t be able to spend more than they have available. Teach them to check their account regularly and to keep their card number and PIN safe. Many online retailers now accept debit cards which can open them up to a whole new world of dangers (things like fraud, identity theft, and simply even buying things that they can’t return easily or spending too much money on shipping costs).

Do they expect You to Top Up their Account every time they Run out of Money? How are they with their Money Currently?

Teach your child to understand that their debit card is not an ever revolving door of free money. Make sure they understand that if they run out of money before their next scheduled allowance, then they have to deal with it. Constantly topping up your child’s account when they’re running low  will only enable them to passively spend their money rather than actively thinking about every purchase.

Moving is a stressful time in any person’s life but there are a few things that can be done ahead of time to reduce your anxiety.

Here are some tips to ensure you’ve got all the basics covered long before the morning of your move:

Change Your Address Beforehand

The sooner you can remember to change your address with the post office, the better. You don’t want to discover too late that your mail is being sent to your old address rather than your new one. If you’re moving out of your old home a couple of days or weeks before moving into your new one, you can also ask the post office to hold your mail or you can have it forwarded to a different address in the interim (that of a friend or a sibling/parent for instance).

Only Move the Essentials

As tempting as it might be to pack up every single belonging you own, force yourself to think critically about what you really need. Moving is the perfect time to pare down to the essentials. Start a ‘donation pile’ and a ‘giveaway to family and friends pile’ and remember that there are some things that it might even be cheaper for you to just buy for your new home rather than paying to have it moved. If you find yourself uncertain about whether or not to pack a large item, let yourself sleep on it overnight and see how you feel about it the next morning; often your gut feeling will be clear enough to guide your decision.

Donation Pile

Research local charities and try to prioritize or target organizations that give your used items to people in need rather than selling them. There are hundred of families desperate for a new kitchen table or sofa who could benefit from your furniture.

When it comes to clothes you don’t want to pack, there are tons of charities that accept used clothing (so long as it’s been washed first) and it’s never a bad idea to ask your friends and family if there’s anything they want to take off your hands as well.

Whether you’re looking to buy a new or a used car, there are a few things you should be on the lookout for before taking the plunge:

Beware the acronyms ‘MVA’ and ‘ADMU’. Another one to watch out for is prep fees

Take a close look at the stickers on the windshield of the cars at the dealership. Do you see charges listed under ‘MVA’ (Market Value Adjustment) or ‘ADMU’ (Adjusted Dealer Mark Up)? Both of those charges are bogus and exist solely to pad the sale for the dealer. Unless the dealer can give you a thorough and accurate breakdown of the charges and justify them, chances are they’ll stand in the way of allowing you to negotiate fairly for yourself.

Another charge to be mindful of is a ‘prep fee’. Any fees the dealer might charge for prep should already be included in the retail price of the vehicle before it’s even put out on the lot. Make sure you ask the dealer to explain why they’re adding on that fee after the fact.

Check the Carfax/See How Many Accidents are On Record

Make sure you look at a full breakdown of the car’s history. Follow the chain of title to make sure every single time the car was bought and sold is accounted for. This will also help you ensure that the mileage on the car is accurate and that the odometer hasn’t been reset to display a lesser number in an effort to fool you. You should also check to see how many accidents the car has been in. An accident or two is okay, but as soon as you get into the 4-6 range your best bet is to look for a different car.

The Dealership’s Finance Department is Trying to Push You into a Deal

When buying a car (new or used), your best bet is to go to a bank or other financial institution so you can be pre-approved prior going to the dealership. If that’s not an option for you, make sure that you educate yourself and are aware of all of the ways dealers will try to pad the sale or approve you for a payment plan that goes against your best interests.

Driving safely is always important, but it’s an especially pressing matter when the road or weather conditions are less than ideal. We’ve come up with a list of tips to help you navigate the roads no matter what the season!

Weather Condition: Snow and Ice

Driving in snowy and icy conditions is notoriously dangerous, so your priority should be accident prevention.

Have snow tires put on your car.

Maintain lots of space between you and the car in front of you.

Give yourself plenty of room and plenty of time to brake.

Keep your eyes on the cars next to you in case they slide around or veer out of their lanes.

Make sure you clean the snow off the top of you car completely. This might seem obvious but there are far too many drivers who give in to laziness and only bother cleaning the front and rear windows. By not cleaning the top of your car, you risk obstructing the view of the drivers behind you should snow or ice blow off block their visibility.

You don’t need to warm you car up in cold weather before driving, but do go easy for the first 5-15 minutes on the road to avoid putting unnecessary strain on the engine.

Always be prepared for black ice and drive slowly enough that you’re able to react safely.

Weather Condition: Rain

Rain is one of the most universally difficult driving conditions for people on the road. Similar to driving in the snow, the key to staying safe is being mindful of the other vehicles around you.

Slow down. You should always be driving slower in rainy conditions than you would in dry weather.

Be aware of what the cars are doing and be prepared to react to any potential skidding or sudden braking.

Give yourself ample time to brake at lights so you don’t skid.

Go easy when making turns.

If you can’t see where you’re going/aren’t sure you’ll be able to drive safely, pull over until the rain lessens.

Make sure your windshield wipers are working properly before you leave.