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7 tips for staying out of debt when unemployed

7 tips for staying out of debt when unemployed

While nothing will remove the sting of unemployment, there are still things you can do to weather job loss in a down economy. According to Statistics Canada, the unemployment rate hit 8.7 percent in August 2009. Although this is only a slight increase from July 2009, it is still a concern, especially since it's during tough economic times that unemployed people become consumed by debt.

Financial experts such as retired financial consultant and personal accountant Bill Christie suggest that people prepare for unexpected events such as unemployment well before they occur. "Folks should have at least three months of expenses saved up just in case. That way they are prepared for the initial blows of unexpected hard times, and won't turn to credit to pay regular bills."

But what can most of us, who don't prepare ahead of time, do? The following seven tips can help you cope in hard economic times, and help you stay out of debt while you're out of work.

1. Make a budget and stick to it. Figure out how much money you'll have to work with, and how much money you'll need for your bills. You aren't going to be able to maintain whatever lifestyle you had before you lost work, but you can still get by. And remember, you'll need to factor in such things as transportation, stamps and other things that you use while you're looking for work.

2. Create a food plan. To stay within your budget, create weekly menus where you can use items as leftovers, or even freeze food for future meals. Watch for grocery sales in your local newspaper, and be sure to buy nutritious foods that have a longer shelf life and fill you up (e.g., pastas, canned/frozen fruits and veggies, beans), rather than food that spoils easily, or is cheap but not healthy. See if you qualify for any sort of food assistance through community assistance programs or your E.I. office. Food is a basic necessity we all need to survive. Just because you are enduring tough times shouldn't mean you have to starve.

3. Take those odd jobs nobody thinks of. Remember those neighborhood jobs the teenagers did? Look for some of those jobs. Mow people's lawns, house/dog/babysit, do handy work or fix cars, if you have a talent for such things. You can also start a small business based on the talents you had at your last job, or try making a bit of pocket cash from that hobby you enjoy.

4. Don't be too proud to take a part-time job. Places like McDonald's, Subway, Wal-Mart and others are always hiring. It may not be the career job you're looking for, but it's an income to help pay the bills until you get another job in your field. Don't turn down jobs that aren't "up where you worked." It will feel better to be able to pay your bills than to let them pile up.

5. Don't use credit. Cut up those cards, take that line of credit off your bank card, and avoid using any other form of credit during unemployment. It's way too easy to put your mortgage or rent payment on your credit card. Sure, it'll be paid, but what about next month? Accumulating rent on your credit cards or line of credit will only create more stress. And when you do get a job, you'll be spending most of your earnings paying off what you stuck on credit instead of getting yourself back on your feet. Another tip Christie offers: "Call any of your creditors and ask them to put your account on hold or cancel it completely if you have a card with an annual fee. You may not use the cards at all, but you'll still be charged that fee and -- guess what -- that will accumulate interest, too. You don't want your credit reports messed up for a small charge."

6. Accept outside help. If people reach out to you offering food, meals or child care while you go to interviews, accept it. People who offer help do so because they genuinely want to help you in some way. We all need help during tough times, so don't turn any open hands away.

7. Seek counseling if you need it. A lot of us experience depression when we're out of work for a long time. Do what you can to stay positive, including seeking some sort of counseling. Most E.I. offices offer such services, and there are places in the community that will listen, too, including churches, drop-in centers or similar locations.

One of the most stressful things in our lives is to lose our livelihood. It can be scary to wonder where the money will come from to pull us through, but never turn to credit for solutions, as that will only create more problems. Stay positive, watch your spending, and seek whatever counseling you need to get by.
Published: September 9, 2009

Breaking down the various types of credit cards

Breaking down the various types of credit cards

In the early days of credit cards, things were simple and standard: Each issuer produced one card with one set of features. Today, credit cards come in multiple levels with ranging interest rates, fees and reward programs, so before you fill out an application, it's important to know which will best suit your financial situation and lifestyle.

The following is a brief description of the most common types of credit cards available.

Types of credit cards

Standard credit cards
Balance transfer credit cards
Low interest credit cards

Credit cards with rewards programs
Cash back credit cards
General reward points credit cards
Hotel/travel points credit cards
Retail reward credit cards
Gasoline points / rebates credit cards
Automobile manufacturer reward credit cards
Home improvement rewards credit cards

Airline miles / frequent flier credit cards
Airline-specific credit cards
Generic airline miles cards

Credit cards for bad credit
Secured credit cards
Prepaid debit cards

Specialty credit cards
Business credit cards
Student credit cards

Standard credit cards
These credit cards are the most common and are readily available from most banks and financial groups. They are unsecured, which means you do not have to put down a security deposit to prove the money can be repaid. The way the annual percentage rate is offered or calculated for these cards can vary. Here are two examples:

* Balance transfer credit cards
Balance transfer credit cards allow consumers to transfer a high interest credit card balance onto a credit card with a low interest rate. Typical in the market today are balance transfer credit cards with an introductory annual percentage rate (APR) of 0 percent, with that introductory or "teaser" rate lasting several months up to a year. The terms of balance transfer credit cards varies between offers, so be sure to thoroughly read the terms and conditions for each card.
* Low interest credit cards
Low interest credit cards offer either a low introductory APR that jumps to a higher rate after a certain period, or a single low fixed-rate APR. Low interest cards can be very useful when consumers need make a large purchase because it allows several months to a year to pay it off with very low or no interest. Before using a low interest card, read all the terms and conditions of the introductory rate so you will not be surprised by fees or accumulated interest.

Credit cards with rewards programs
Reward credit cards allow users to earn incentives for making purchases with their credit card. Points accumulate for each dollar charged on the card, and cardholders can redeem these points for various rewards. Reward cards usually require better-than-average credit for approval. There are seven major types (not including airline miles / frequent flier cards, which we'll discuss a bit later).

* Cash back credit cards
This type of credit card allows you to earn cash rewards for making purchases. The more the card is used, the more cash rewards you receive. Most cash back cards earn users around 1 percent of total purchases, excluding interest and finance charges. Some cards offer a higher cash back percentage with increased usage; others offer a higher cash back percentage at select merchants or for particular types of purchases. Since cash back programs are costly to credit card companies, some of these cards have an annual fee that can vary from $50 to $100. This type of card is best for people who are faithful about paying off their balances each month. If used appropriately, a cash back credit card can earn the cardholder a significant amount of money over time.
* General reward points credit cards
Reward credit cards are similar to cash back cards in that cardholders can accumulate points toward a reward structure, which is based on how much the card is used over time. General reward cards offer cardholders a variety of items to cash points in for: gift cards, electronics, hotel stays, plane tickets, jewelry, pet supplies and more. Some rewards can be attained for 1,500 points; others cost 200,000 points. Reward programs and promotional offers often change; thoroughly review a card's terms and conditions before applying. Some general reward credit cards come with an annual fee ranging from $50 to $100, although most have no annual fee. Reward cards are best for people who regularly pay off their balances each month. By minimizing their finance charges, individuals will reap greater benefits from the associated rewards credit card.
* Hotel or travel points credit cards
This is a genre of credit cards specific to hotels and travel. Some cards are co-branded with hotels. These credit cards allow you to earn points for all purchases, in addition to bonus points for dollars spent on stays at the respective hotel chain. You can redeem your points for free nights and upgrades at the hotel chain your card is co-branded with.Then there are broader hotel and travel cards, with which points can be redeemed for travel, theme park admission, stays at major hotel chains and more. Because these reward programs can be costly for credit card companies, many of these cards come with an annual fee. If you are not a frequent traveller, the annual fee may negate the benefit of the rewards earned. .
* Retail rewards credit cards
These credit cards are co-branded with a major retailer, such as Hudson's Bay Company or Sears Canada. Points are accumulated by making everyday purchases, though cardholders are awarded with double or triple points for making purchases from the co-branded retailer. Reward points must be redeemed for products or services from that specific retailer.
* Gas cards with points or rebates
Gas cards come in two species: general and brand-specific. General cards treat all gas companies equally, while brand-specific cards favor one gas company. If you tend to be loyal to a certain gas company, a brand-specific card may benefit you, but if you tend to just stop at whichever station is closest, you may be best with a general gas rebate card. Additionally, it's important to remember that a gas company may be very popular in one state, but uncommon or nonexistent in other states, making brand-specific credit cards less than ideal for long road trips.
* Automobile manufacturer rewards cards
Auto rewards cards allow consumers to earn points that can be redeemed toward the purchase of a new or used car, auto-related expenses or merchandise. This card is most beneficial to those looking to purchase a vehicle in the near future.
* Home improvement rewards credit cards
These credit cards allow consumers to earn reward points for all purchases, while earning extra points for home-related expenditures.

Airline mile / frequent flier credit cards
While certain general reward credit cards allow points to be redeemed for plane tickets among other things, there is a subset of reward cards specifically for air travel. This type of card allows consumers to earn airline mile credits whenever they make purchases. Some cards are co-branded with a specific airline, while some are generic and can be redeemed for tickets with a variety of airlines. Points can be redeemed for airline travel, much like frequent flier miles.

* Airline-specific credit cards
These cards are associated with one airline. Typically, the cardholder accumulates points from both making purchases with the card and by flying on the specified airline. These cards come with other perks -- for example, some allow you to earn double points when you use the card to purchase plane tickets with that airline.
* Generic airline miles cards
Credit cards like these allow you to redeem your reward points for air travel through any airline, travel agent or online travel site. This is a great option for people who aren't involved in a frequent flier program and aren't loyal to any particular airline. It allows you the flexibility of redeeming your miles for whichever airline best suits the needs of your trip. With a generic airline card, you gain points for every dollar spent on the card, but because it is not associated with a particular airline, you can't gain additional points by flying.

Each airline credit card is a bit different, so be sure to read the card's terms and conditions to find out how many miles you gain for every dollar spent. Other things to look for are how many miles you need before you qualify for a free plane ticket, if there is a cap on points that can be earned annually and whether or not unused airline miles expire. Some expire in five years while others do not expire at all. Airline mile reward programs can be costly for credit card companies, so many of these cards come with an annual fee. This type of reward program is beneficial for frequent travellers or those who want to use their card to plan vacations, but the associated fee might make them impractical for other cardholders.

Bad credit and/or credit repair cards
Credit can easily go from good to bad due to poor budgeting or simply by an overlap between jobs. If your credit score is less than satisfactory, it does not mean you cannot qualify for a credit card. There are several options available to those who have had bad credit in the past and for those who are currently trying to repair their credit.

Depending on your specific situation, debt consolidation or use of introductory APRs on balance transfers may be wise choices. If you still need credit or want to start repairing your credit by proof of action, there are several credit cards designed to help rebuild poor credit histories.

* Secured credit cards
Secured credit cards require collateral for approval. A security deposit of a predetermined amount is needed in order to secure the credit card, and the security deposit generally needs to be of equal or greater value than the credit amount. Collateral can come in the form of a car, boat, jewelry, stocks or anything else of monetary value. Secured credit cards are for people with either no credit or poor credit who are trying to build or rebuild their credit history.
Cards that help rebuild credit often come with low credit lines (such as $250) and additional fees, such as an application fee, may apply. Be sure to read over any terms and conditions for these add-on services before applying. If you use the card responsibly and pay all your bills on time, you can ask for a credit line increase down the road. The extra fees and low credit lines will be worth it if a secured credit card helps you get your overall credit back on track.
* Prepaid credit cards
Prepaid cards are not credit cards at all, but are used and accepted just like them. The advantages of prepaid cards is that there are no finance charges and they help you avoid debt since all purchases are paid for beforehand. With these cards you determine the credit line by transferring however much money you'd like to have available to spend to the card. This eliminates the risk of running up credit card debt and makes the budgeting process much easier.
Although most prepaid cards do not charge finance fees, other fees may apply, including monthly fees, startup or application fees, over-limit fees, ATM fees, reload fees and more. Be sure to thoroughly look over the terms and conditions for each specific card before applying.

Specialty credit cards
These types of cards are for consumers with unique needs for their credit use, such as business professionals and students. These credit card programs are designed specifically to meet the needs of those individuals.

* Business credit cards
These cards are available for business owners and executives and have many of the same features as traditional credit cards: low introductory rates, cash back programs and airline rewards. The difference is these cards come with many additional benefits and perks exclusively for those in the business world.
Some of these bonuses include: Business expenses kept separate from personal expenses; special business rewards and savings; expense management reports; additional cards for employees; and higher credit limits.
Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying.
* Student credit cards
Many college students need a credit card, but they generally have little or no credit history, which makes it difficult to get approved for a traditional card. Student credit cards are specifically designed for those enrolled in accredited four-year colleges and universities to help them build a credit history from the ground up.
Compared to consumer credit cards, student credit cards are often scaled back somewhat in terms of rewards, features and other benefits, but they can still be a valuable commodity. If used wisely, a student can take the first step towards building a solid credit history with this type of credit card. Once they've proven financial responsibility, it will be much easier to qualify for reward cards and higher credit lines.

Updated: April 14, 2009

How travellers maximise rewards card deals

How travellers maximise rewards card deals

Canadians can repack their beach bags for a soggy spring tour of London, if a great deal is on the table. Travellers aren't as concerned about where they are going, what time of year it is or how they are getting there if it means saving money.

According to a recent TD Canada Trust Poll, 99 per cent of Canadians look for a deal when they are booking their vacation.

Travellers love to stretch their dollars with not only travel deals, but also by cashing in points for travel packages. Special rewards credit cards can be used for everyday purchases to collect points faster, which in turn can be cashed in for a flight, hotel or a travel package.

Sixty-seven per cent of travelling cardholders consciously collect extra travel rewards in advance of booking a trip. This means using the same card for collecting travel rewards for each and every purchase to reach a points goal.

Forty per cent of collectors have used or redeemed their rewards points for travel over the past year. Twenty-three per cent have felt that their travel rewards helped them to afford their trip. One in five (19 per cent) say the reason they took advantage of the travel points was because of the lagging economy.

According to the poll:

* 23 percent of Canadians said they would not travel if they were not able to get the deal they wanted. They would prefer to stay at home rather than paying full price.
* 60 per cent of travellers would consider changing the dates of their vacation if they could save on travel.
* 42 per cent would even consider changing their vacation destination to get a better deal.
* 62 per cent of Canadians are willing to plan far enough in advance to save money on early booking discounts.
* 55 per cent of travellers will avoid peak travel seasons when prices are overinflated due to demand.
* 54 per cent of Canadians will search for the best package deal before booking a trip, and 35 per cent of them will wait until the last minute to get vacation sell-off deals.

Season, mode of transportation and travel destination can all be switched as quickly as it takes to repack the swimsuit for a brolly in order for Canadians to maximize their spending power.

Written by Melanie Dixon.

More airlines moving from cash to plastic

More airlines moving from cash to plastic

The next time you wish to purchase a cocktail, earphones, a pillow or a blanket on an Air Canada flight, be prepared to pull out your plastic. As of May 1, Canada's largest carrier no longer accepts cash for on-board purchases. Following in the heels of American Airlines, which went cashless in February, duty-free items, food and alcoholic drinks now require a credit card.

Air Canada's plastic-only policy is intended to create greater convenience for passengers, particularly non-North Americans, many of whom don't wish to carry Canadian or U.S. currency for the sake of purchasing an in-flight pillow. What's more, by charging items to a credit card, Air Canada maintains that flight attendants won't have to struggle to make change, resulting in faster service. Not to mention a clearer pathway to the lavatory.

But jetsetters, beware. According to Chad Viminitz, a financial behaviour coach with RTR Advisory in Edmonton and author, no longer accepting cash for purchases "is usually not a benefit to the consumer. You've eliminated a very solid financial decision for the consumer to pay cash. You've taken that away from them."

The problem, continues Viminitz, is that "credit card companies know that you'll spend on average about 23 percent more than you will with cash. So at the end of the day, credit cards aren't necessarily more convenient when you're spending more than you expected."

But that's not the only risk of creating a cashless society in the sky. Identity theft strikes countless travelers year after year. "It's not people getting robbed for a couple hundred dollars while you're walking through the airport," says Viminitz. "It's about someone from another country stealing your information and now your credit card information is disseminated around the world." For this reason, Viminitz recommends notifying your credit card company of any travel plans so that atypical purchasing patterns can be flagged for further investigation. As for in-flight purchases, Air Canada stresses that all credit card payments are recorded using secure encrypted handheld devices.

Currently, the maximum credit card purchase allowed onboard Air Canada is $500. Only Visa, MasterCard, American Express, Diners Club and Japanese Credit Bureau cards will be accepted for duty-free purchases. If you don't have a credit card or your child age 12 to 17 is flying as an unaccompanied minor, you can pre-purchase onboard amenities online up to an hour before your flight. A code proving the purchase will appear on your boarding pass.
Published: May 19, 2010

Total Debt Service Ratio Formula

Total Debt Service Ratio Formula:
PITH1+ Other Debt / Borrower’s Gross Annual Income2

1PITH means principal, interest, property taxes and heat costs plus 50% of the condominium fees. For
chattel or leasehold loans, include 100% of site or ground rents.
250% of subject property gross rental income can be included. T+H for the property generating rental
income can be excluded. Visit www.cmhc.ca and search key words “TDS formula” for more information.
Flexibility provided for borrowers who have a strong history of managing credit. Total Debt
Service Ratio 42.01- 44%: Recommended minimum score of 680.

Taxes in july

Last night I helped someone do their taxes by using intuit's quicktax online tax package.

The online tax tool was able to provide his net return within only 15 minutes. It was a basic T4 and some deductions but it was still quite painless.

If you missed the filing deadline then don't be afraid of cra or even the irs and get your tax return filed today!
Sent wirelessly from my BlackBerry device on the Bell network.
Envoyé sans fil par mon terminal mobile BlackBerry sur le réseau de Bell.