Car Loans

A customer says to the car salesperson "I'm paying cash, so I expect a bigger discount!"   The car salesperson nonchalantly shrugs and says "It doesn't matter if you pay cash or get an auto loan, we get our money either way!"
The REAL TRUTH is, the car dealership WILL try to talk you into letting them arrange car financing for you!
You see, the finance office in a car dealership is a Very Lucrative Profit Center!  Very often a car dealer will make more profit from the car financing than they do from the car sale itself! Each car dealership has a Finance Office.  The larger dealerships may have several. The person in charge of this office is called the Business Manager, or the F & I Manager (F & I for Finance and Insurance) or simply the Finance Manager.   This person will usually look and act more like a conservative banker than a hard core salesperson... but don't be fooled!
To sum it up succinctly, the Finance Manager's sole purpose is to see to it that you walk out of that dealership with the HIGHEST Monthly Payment Possible!
This person will be presented to you as someone who will arrange an auto loan for you at the lowest rate possible...as if they are looking out for your well-being. . . but don't believe them for a second! Even if you are paying cash, or arranging your own car financing, you still have to sit down with the Finance Manager, because he or she also does the paper work and title papers associated with the deal!  So there is no avoiding this person!
So Be Prepared!
And if you are paying cash, or have arranged your own car financing, either through a bank, a credit union or through the Low Cost Financing Alternatives right here on this website, any Finance Manager worth his or her salt will try to talk you out of it by telling you all the so-called advantages of letting them arrange the auto loan for you!  They will have at their disposal computer programs and charts designed to convince you!  Don't fall for any of it!  It's All Crap!
The dealership, and consequently the Finance Manager who by-the-way, works on a commission, make their money in the Finance Office primarily in four ways: 

1.  The Car Financing Itself.  The banks will Kick-Back a certain percentage of the Amount Financed to the dealership!  The higher the interest rate the F & I person can talk you into, the higher the Kick-Back!  The Kick-Back could be as high as 10% or MORE!
This means that on a $20,000 loan, the auto dealership could be making as much as $2000 or More off of you just for arranging the auto loan!  And guess who's paying that extra $2000?
Any ideas?
YOU ARE!!!
On a 66 month loan, $2000 could raise your payment as much as $40 a month! That's a lot of YOUR MONEY lining the car dealer's pockets when it doesn't have to!
Now, just to be fair, the car dealership doesn't always make that much.  Then again, at times they could make more!  But even if they are Making $500 or $1000 Off Of You it's still YOUR MONEY lining their pockets!  Money that's raising your monthly payment;  money you can easily save!
The only time the dealer doesn't make much money from car financing is when you take advantage of the low rates advertised by the manufacturer.  Like the 0.0%, 1.9%, or the 2.9% or whatever.  And in order to get these rates you usually have to give up the Rebate!  In this case the dealership will be paid $50 or $100 by the car manufacturer.  So this is a safe situation for you!
BE PREPARED!
Compare rates and grab the best auto loan deal right from the privacy of your own computer!  Get Free auto loan quotes from the following lenders:

• The following is an excellent source for auto loans for people with an "Excellent" all the way to a "Bad"Credit Rating:
  AutoLoanSolutions
• Here are three excellent sources for people who have a "Poor" or "Bad" Credit Rating:
  AutoLoanSoup, and MyAutoLoanFinder.com

Specialize in helping individuals obtain bad credit car loans for the purchase of new or used vehicles.  Apply to them and compare.  You're under no obligation to accept any of their offers. If you're not sure what your credit rating is get your Get all 3 Credit Reports plus 3 Free Scores Now!

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2.  The Second Main Area for Profit in the Car Finance Office is Selling Extended Warranties. They are available for both new and used cars.  There are many different warranty companies and many different levels of coverage available.
A few companies are good, most are not!
For a more in-depth discussion about what to look for in an extended warranty, and how to be sure you pick a good company, visit Extended Warranty Tips right here on this web site!
If you decide to purchase a warranty from a car dealer understand this:  The dealer is marking-up the price anywhere from $400 on up to $2,000 and MORE every time they sell you a warranty!
An extended warranty is an excellent idea.  You never know when a car is going to break down.  One major repair could very easily cost more than the price of the warranty itself!
Buying a quality extended warranty from a company you can trust will give you great Peace-Of-Mind.
You can avoid the Big Dealer Markup  on extended warranties by getting FREE PRICE QUOTES on New and Used vehicle warranties from the following extended warranty companies:  Extended-Vehicle-Warranty.com and SmartAutowarranty.com

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3.  The Third Area That Will Cost You a Fortune in the Car Finance Office is Credit Insurance.
There are two kinds of Credit Insurance that the Finance Person will try to sell you. Credit Life Insurance is the first.  This covers you in case you should die before your auto loan is paid off!  If you have an auto loan in your name with Credit Life on the loan and you die before the auto loan is paid off, The insurance will pay off the balance of the loan.
If there are two names on the car loan like a husband and wife for example you can get Joint Credit Life to cover both people.
The second kind of Credit Insurance is called Disability or Accident and Health.   This coverage is very expensive, and it covers you in the event that you become disabled through sickness or injury and are unable to work.
This coverage will make your payments for you until you get back to work.  You usually have to be disabled for at least 15 to 30 days before you become eligible.  Also, there is much fine print for pre-existing conditions.
So Be Warned!
The dealer will usually earn about 50% of the insurance premium on these two coverages.  And believe me, this can add up to $1000s. . . AND IT'S YOUR MONEY!

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Another product the F & I person may try to sell you is Gap Insurance.  Gap insurance covers the difference between the value of the car and what you owe on it in case the car is stolen or declared a "total loss" from a wreck.
Most people who finance or lease a vehicle owe more on it than the vehicle's actual book value.  So if the car is totalled from an accident or from being stolen your insurance company will only pay the book value to pay off the claim.  If you owe more on the vehicle than they give you there's a "gap" that you must pay off.
Gap insurance covers this "gap" or difference so you don't get stuck owing money on a car that you don't have anymore.  It's a good thing to have, but you do not want to buy it from the car dealer!  They will mark the price up $300 to $500 and more over the actual cost of the coverage!  I've said it before "That's Your Money!"
A much less expensive alternative is to purchase Gap Insurance online where you don't have to worry about being ripped off by your car dealer.  To find out if it's right for you and to get a Free price quote visit Gap Insurance.

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4.  The Finance Manager Will Try to Sell You a Variety of Other "Afretmarket" Products.
Everything from Rustproofing and Paint Sealant to Window Etching and Alarm Systems.  Needless to say, all of these items will carry a huge markup, thereby lining the car dealer's pockets even further with Your Money!
All of these things we've been talking about make your payment go higher and higher!  And don't forget, in addition to the individual commissions the dealer earns on each product, he is also earning a percentage of the Amount Financed!   So the more stuff you put on the loan, the higher the Amount Financed and the more of Your Hard Earned Money goes from Your Pockets Into the Dealer's Pockets!
It's like the car dealer gets a double commission when you add this stuff to your auto loan!  DON'T DO IT!

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If you're going to finance a car, here are a few pointers to keep you from paying too high of a payment:
1.  Get all 3 Credit Reports plus 3 Free Scores
2.  Get Free Online Auto Loan Quotes From the Following Lenders:

• The following is an excellent source for auto loans for people with an "Excellent" all the way to a "Bad"Credit Rating:
  AutoLoanSolutions
• Here are three excellent sources for people who have a "Poor" or "Bad" Credit Rating:
  AutoLoanSoup, and MyAutoLoanFinder.com

By getting Loan Quotes from the above lenders you'll know what kind of car financing is available to you, then you can decide if you want to go with one of them or if you want to use the quotes as a negotiating tool with your local bank or credit union!   By the way, the car dealers hate it when you arrange pre-approved financing, but it's the smart way to go. 3.  NEVER negotiate a car deal based on payment!   If the salesperson asks you what payment you'd like to have tell him or her not to worry about the payment.  You want to negotiate a price on the car.  Not a payment!
Beware of the "Packed Payment!"  If you let the car dealer arrange the car financing on your purchase, and you negotiate the deal based on a payment then very likely the payment that you agree to will be much higher then is needed to cover the cost of the vehicle.
You see, the higher payment creates a "pack," or room in the payment to add in things like credit insurance, an extended warranty and other items like window etching, security systems, rustproofing, paint sealant and other high profit items that they can squeeze in....of course without you knowing you're actually paying more for the extra stuff!  They'll just tell you it's all included in the price!
Bottom line?  Don't negotiate on payment.  Only on the price of the car!  Do it any other way and you will be spending too much!
****Sidenote****
When negotiating a car deal don't let on to the salesperson that you have your own car financing in place. If you tell your salesperson up front that you have already arranged an auto loan, and he or she relays this information to the Sales Manager, the manager might make the decision to hold out for more profit on the car deal (the Front End) thinking that they're not going to make as much on the Back End (Finance Dept. profit)!
****Sidenote****
Some years ago I was a salesman in a Ford dealership when I had a young couple who wanted to buy a Ranger 4X4 pickup.  I asked them if they would buy the truck for $450 a month!  They said "Yes!"  They didn't care about the interest rate or the length of the loan!
For $450 a month for 66 months, (a "packed" payment) we made a Very Big Profit on the truck, plus the Finance Manager included a high interest rate, an over priced extended warranty and credit life and disability insurance!   He made a killing too!
If this couple had come in prepared and educated, they could have gotten the same truck for about $250 a month!!!
Can I say this enough?  BE PREPARED!
So PLEASE, use the information on this website to educate yourself before you step one foot on a car lot!  Afterall, It's Only Your Money!

5 Tips for an Easier Financial Life for Women

My Multiple Egg Baskets blog is starting to attract more attention with some lululemon wearing women at work. I don't know...I find it hard to listen to someone that promotes the lululemon brand when it's time to wear some casual sweats. Mabye I'm just a simple guy. However, my conversations with these women had led me to write this blog about 5 Tips for an Easier Financial Life for Women from their perspective.

No matter what we do, taxes and financial tribulations will never go away.
Unfortunately this can be a nightmare for some, especially since they not only take out large amounts of money but they also ruin lives. It is essential for any woman to know tips on how to avoid financial problems. Millions of women do not handle their own taxes; therefore they are left vulnerable and open to many troubles that may arise.

It is important to note that women need a larger amount of retirement money. This goes hand in hand with the notion that women generally live longer than men. If this is indeed the case, women will need to be more financially stable. Here are fundamental tips when deciding how to handle your financial situations:

1. Taxes

It is important to know all you can about your taxes. While it is great to have someone help you, it is also necessary for you to know what is going on. For instance, if something was to happen and you didn’t handle them, you may never know until it was too late. Many women face crimes and never realize it until they get summoned to go to court. This is due to not filing for taxes or other criminal related acts.

2. Retirement Planning

Always think of retirement! Although younger adults rarely have this on the mind, it is beneficial for you to always plan for it. If your company does not have a pension plan, it is smart to set up your own special fund. By putting in a certain amount of money each month, it will quickly add up over time. This will allow you to have a stable fund for when you do retire.

3. Know all Benefit Programs of Your Employer

If you do have a company with great benefits, it is important to know everything you can about them. Many do not know how to fully take advantage of all of their resources. Therefore, using these benefits as much as you can will help you in the long run.

4. Pay off your loans!

Being in debt will only harm you in the long run. You need to either create a plan on your own to reduce spending, or see a financial expert. Although many are ashamed and hesitant to do this, it will actually help you get out of debt faster. These professionals can come up with a wonderful plan and will break it down by month. This way you can start paying your way out of debt, but without having to live on the street. This will also give you a better outlook, rather than feeling depressed about the current situation.

5. Make a Budget

Developing a budget can help anyone, no matter how well they are doing. By giving yourself a budget, it will allow you to save for other important things. For instance, if you need to start a college plan for your child, you can put the additional shopping money in a fund. Other examples include saving money for rent, or using extra money for a much needed vacation.

Tips on Using Credit Cards Wisely

Credit cards can be both a curse and a blessing. If you don’t use them wisely they can lead you into debt and exhaust your monthly income. On the other hand, if you do use them wisely then you can improve your credit rating and improve your monthly cash flow.

Create a Strong Credit History

Using credit cards is a great way to develop a positive credit history. To create a strong credit history you will need to make periodic purchases, and you will need to make on time payments. The best way to do this is to use the credit card to pay for purchases that you would normally make during the month using cash. Then at the end of the month pay off the balance completely. This way you build a positive credit history without accumulating interest charges.

I follow this strategy with my CIBC Visa Aeroplan card. I put everything on it and then pay it off in full at the end of the month. I'm averaging several free flights with Air Canada each year.



Using Credit Cards to Grow Your Business

If you own a business then you can use credit cards to increase your purchase power and improve your company’s cash flow. Credit cards can be used to purchase equipment and supplies when you need them, and then allow you to pay for these items over time. To maximize the benefit of your business credit cards you will want to find credit cards with low interest rates and you will want to pay off the balances as quickly as possible. This will help you keep your line of credit open for business purchases.

This would be an ideal scenario for a low interest rate credit card. I have a Scotiabank Cash Back Visa credit card. I get a small percentage back on my purchases. It's not much but the main point is that the interest rate is very low.

When Not to Use Credit Cards

In addition to knowing when to use your credit cards, you should also learn when you shouldn’t use your credit cards. Credit cards shouldn’t be used when you are emotionally unstable. Impulse buying can be very addictive, and it can lead to serious debt problems. Credit card purchases should optimally be strategically selected. You will also not want to give out your credit card number to unsolicited telemarketers. There are many scams circulating that involve asking for credit card numbers over the phone.

Finally, you don’t want to use your credit card in a country that is known for credit card scams and identity theft. If you will be traveling abroad make sure that you check with the Canadian Consulate in that country about how safe it is to use your credit card in that country.

Car Loans Canada

Car Loans Canada is the place to turn for people with bad credit in Canada who want and need a car. You might think that it is not possible to buy a car if you have anything short of spotless credit, but this just isn’t the case.
Canada car loans are out there and available, you just need to know where to look. This is where we come in! Read our articles on bad credit audio financing, how to rebuild credit, getting a car loan after bankruptcy and other articles to learn how you can get the car you need now.
The good news is that having bad credit in Canada doesn’t mean you have to forget about having a car. Click on any of our articles to learn more about your options, as Car Loans Canada can connect you with dependable and trustworthy dealerships and lenders who specialize in helping people just like you.
Our company can make the process of finding the right car loan for you easy, streamlined and, of course, secure. Information is power, and having the right information can save you money. Check out our website, apply online by filling out a car loan application, and you will soon find yourself behind the wheel of a new car. Yes, it is that easy!

Using leverage to purchase investment properties

The Power of Leverage

This column is dedicated to teaching subscribers the principles of real estate investing, based on our personal experience and knowledge. Feel free to validate any of this information with your own sources.
Keep in mind we do not provide financial advice -- you should see a financial planner and accountant for that.
Some of North America's wealthiest men have said the following:

• "Real estate is the basis for all wealth."
  - Theodore Roosevelt
• "Buying real estate is the best, safest way to become wealthy." - Marshall Fields
• "90% of all millionaires became so through owning real estate." - Andrew Carnegie

So exactly WHY is real estate so good? In a word... leverage. Dictionary.com defines leverage as "investing with borrowed money as a way to amplify potential gains". How are potential gains amplified? Let's look at some examples. Example #1 - Buy a house with all cash

Purchase price	= $200,000
Down payment	= $200,000
Sale price	= $300,000
Profit	= $100,000
ROI	= Profit / Down Payment
	= $100,000 / $200,000
	= 50%

Example #2 - Buy a house with 25% cash

Purchase price	= $200,000
Down payment	= $50,000
Sale price	= $300,000
Profit	= $100,000
ROI	= Profit / Down Payment
	= $100,000 / $50,000
	= 200%

Example #3 - Buy a house with 10% cash

Purchase price	= $200,000
Down payment	= $20,000
Sale price	= $300,000
Profit	= $100,000
ROI	= Profit / Down Payment
	= $100,000 / $20,000
	= 500%

Notice that as the down payment is reduced, the return on investment increases. That is the power of leverage -- controlling a large investment with a small amount of money. While the masses are lucky to make 10% per year on their mutual funds, the wealthy are making triple digit returns and more with real estate.

Credit cards and low interest

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Should you carry multiple credit cards?

Consumers may be dialing back on their credit card usage, but there are still plenty of good reasons to carry multiple credit cards.

Although there's no one-size-fits-all answer as to how many credit cards consumers should have, taking a good look at your own financial situation and spending patterns can help determine what's best for you.

Here are a few reasons to consider having several credit cards:

Sense of security
Having more than one major credit card can help you feel more secure. Carrying multiple credit cards in your wallet means that if something goes awry, like a credit card purchase won't go through or an ATM eats your card, you have another one to fall back on. In addition, not all retailers and service providers accept all credit cards, and you don't want to be stuck somewhere without a way to pay for a purchase.

Some consumers use a dedicated credit card for online shopping. It can make it easier to keep track of fraudulent activity or limit damage if you become a victim of identity theft.

Or you might want to keep a spare card tucked away safely at home or in a bank safe-deposit box in case your wallet gets stolen or you lose your main card.

Rewards and discounts
Some consumers want a wallet full of credit cards that offer rewards for purchases. These can include perks for travel, entertainment, shopping and services.

Gasoline station credit cards often offer lower gas prices for those who use their card for gas purchases. And many retailers offer percentage discounts off purchases or coupons to entice consumers to use a particular store's credit card.

Boost credit score
While people may fear having several credit cards looks bad to lenders, managing several cards responsibly helps show you're a good credit risk. Lenders look at your debt-to-limit ratio, or the proportion of your available credit you actually use.

Paying your bills on time or paying off your credit cards can bolster your credit score.

Credit cards unauthorized transactions

I haven't been able to find as much information about how to proceed with unauthorized credit card access within Canada.  However, there is a lot of information about credit card abuse within the US.  Read through the summary below if you need some background on credit card abuse and invalid transactions for credit cards.



In the case of unauthorized use of your credit card, the Truth in Lending Act limits personal liability to $50. There is no time limit to report a card lost or stolen, but if you alert the issuer before someone else goes shopping with your card, you aren't on the hook for the charges.

Debit cards don't get the same treatment. You have to report a lost or stolen debit card within two business days to limit personal liability for fraudulent charges to $50. If the thief says "credit" at the register, it still doesn't transform the purchase into a credit card transaction.

"It just means you're processing it through the Visa and MasterCard payment networks as opposed to the other ATM networks when you use a PIN debit transaction," says Chi Chi Wu, a staff attorney with the National Consumer Law Center in Boston.

Billing errors

The Fair Credit Billing Act gives consumers the right to dispute "billing errors" on their credit card statements. Examples of billing mistakes include situations where you purchased goods online that were never delivered, the issuer didn't credit a payment or return of goods, or your statement contained duplicate charges for the same transaction.

The law gives consumers a limited amount of time to catch such errors and take action. You must send a dispute letter within 60 days of the first statement that contained the mistake to the address for billing inquiries. Then the creditor must do an investigation and resolve it within two billing cycles or 90 days, whichever comes first.

The letter must provide your name and account number, a statement that the bill contains an error, the dollar amount in question and the reason for the dispute.

You can withhold payment on the portion of the bill in dispute, but are still obligated to pay at least the minimum due if a balance remains. The card issuer can still report late payments for undisputed debt.

Claims about the quality of goods and services

If your problem concerns the quality of goods or services purchased on your credit card, a section of the Fair Credit Billing Act gives you the right to dispute the charge and stop payment on that portion of the bill until the matter is resolved by the issuer.

"It's basically the right to raise claims and defenses that you have with respect to the merchant to raise them against the credit card company," says Wu.

The law has some important restrictions: The goods must have cost at least $50 and the purchase had to have been made in your home state or within 100 miles of your mailing address. Wu says to check with the card issuer if you completed the purchase online or over the phone.

These restrictions don't apply if the merchant is also the card issuer, or the seller mailed you an ad for the item you bought.

The law also requires that you attempt to resolve the issue with the seller first. Individual issuers may not demand proof, but direct dealings with the retailer may save the trouble of filing a dispute through the card company.

To withhold payment, Wu recommends sending a letter to create an evidence trail, but says you can file a claim over the phone.

Check with the issuer for other claims

Maybe the quality of the high-definition TV you bought is fine, but somebody steals it from your house the following week. Take it up with the issuer. Major credit cards may cover such losses.

Payment processors American Express, Discover, MasterCard and Visa all offer purchase protection on some cards for damage or theft of goods up to 90 days after purchase. Customers with a legitimate claim could receive a repaired or replacement item, or reimbursement for the cost.

Restrictions and benefits vary by program and card. For instance, American Express caps coverage at $1,000 per incident and $50,000 per policy year. Visa limits coverage to $500 per claim of theft or damage due to "fire, vandalism, accidentally discharged water, or certain weather conditions," according to its website.

Check with your issuer or benefits guide to see if your card offers this perk.

Variable Returns Can Work Against You in Retirement

Variable Returns Can Work Against You in Retirement

There is a rough stat that by 2012 approximately 50% of the Canadian federal government workforce will be eligible for retirement.

Mortgage refinance deal mistakes

When applying for a mortgage refinance there are several areas that could ruin your refinancing mortgage deal. Don't let emotion dictate your mortgage refinance package.

Some of the things to avoid when refinancing a mortgage are:

* don't over estimate the value of your property. You may think that your property is a palace but to others it is a 3 bdrm home in need of some rona repairs.
* don't forget about any penalty fees that will occur if breaking your current mortgage. Legal fees, transfer, and ird need to be calculated into your refinance equation
* don't let a fixed rate be your only option
* a 1 year mortgage rate has been the historical winner
* if you do decide on a variable then remember that you should increase your monthly mortgage payment in order pay more on your mortgage principal

Those are the major mortgage refinancing tips that I encountered while looking for canada's best mortgage last month.

What tips do you have?
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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.

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.

Mortgage Refinance Closing Costs

Looking for a new mortgage is only half of the battle when doing your personal finances.  Once you purchase the home you have to be ready for the closing costs.  There are general rule of thumb estimates that cover realtor fees, land transfer tax, lawyer fees, moving expenses, etc...  Here is a handy calculator from ING to help you predict your closing costs when refinancing a mortgage.

When buying a new home, there are expenses outside of your mortgage that you will need to include in your budget. To help you, we have created this closing cost checklist that you can use to keep track of your expenses.

Closing costs calculator

How is my credit report used

Credit information is gathered by credit reporting agencies, sometimes called credit bureaus. There are two major credit reporting agencies in Canada: Equifax Canada Inc., and TransUnion of Canada. Governed by provincial and federal laws, credit reporting agencies store and maintain credit information about individual Canadian consumers for use by members of the credit reporting agency. Members include banks, finance companies, auto leasing companies, credit card companies and retailers.

Credit grantors update individual credit reports regularly by providing information to credit reporting agencies about their customers' credit and payment activities. This ensures that credit reports remain up-to-date and as complete as possible. Other sources of the information contained in your credit report can include public records from courthouses across the country and collection agencies.

Credit card payment calculator added!

http://multipleeggbaskets.blogspot.com/p/tools.html

Use this calculator to determine how you can pay off your credit card debt.

Preventing credit card fraud

You can avoid credit card fraud if you know how to detect it. There are several different types of credit card fraud to avoid:

    * Card not present fraud: fraudsters can obtain your credit card details from such things as discarded receipts. They can then use this information to purchase high value or desirable goods online, by phone or mail order. For transactions online or by phone the retailer does not need to see the card (or require the PIN), hence the name "card not present fraud".
    * Identity theft/account takeover fraud: fraudsters can obtain your personal details from various sources including: discarded mail, intercepted post, phishing, vishing, smishing, spoofing, hoax calls, social networking websites, public records, hacking genuine websites and listening in on telephone calls. Once they have your personal details they can use this to access your account, order cards, change your address, complete a balance transfer and assume the identity of a genuine customer in order to purchase goods or obtain funds fraudulently.
    * Application fraud: this is another form of identity theft. In this case, the fraudster uses your personal details to apply for a brand new credit card or bank account rather than taking over an existing account. This often happens when the genuine customer has moved from their previous address.
    * Counterfeit fraud: this is the manufacture of a fake credit card using genuine card details. The card details are copied from the magnetic strip of the genuine card using a device called a skimmer. This information is then transferred to the magnetic strip on a fake credit card that can be used to purchase goods online or in countries where Chip & PIN has not yet been introduced.
    * Malware fraud: short for "malicious software", malware refers to software programs that are distributed in the form of innocent-looking popups, emails or spam but are designed to damage, capture information or do other unwanted actions to your computer. Common examples include viruses, worms, trojan horses, adware and spyware.





Be sure that you're protected.  I always lift and move the PIN machine when entering the PIN number for my credit card and debit cards.  You never know if there is a spy cam above!

Personal Household Finance Calculator

http://multipleeggbaskets.blogspot.com/p/tools.html

Use this calculator to evaluate your personal household finances.  Are you spending too much on your Mastercad, is your BMW too much of a car lease, or are you ordering too much sushi?

The calculator is a simple tool to get you back on your personal finance track.

Car loans

Car loans for people with bad credit do exist on the market today, and if you are unfortunately in that situation where you've gone through a divorce or lost your job, or suffered any sort of economic downturn it is still good to know that you have the opportunity to get the new vehicle because there are currently some segments of the financial industry that still offer these type of loans which were generally considered high risk until now. So are you in the market currently for a new car? Have you gone through an adverse financial situation? If so, let's see if we can get you a new car.

When applying for a loan for a new car or a used car and you have lower than average credit the first thing that the financial institution is going to look for is your ability to repay that loan. If you currently have a job and are able to provide pay stubs that show a history of at least a few months then you'll more than likely be able to get a new car loan but be prepared to pay a little higher interest rate because of your low credit rating. Remember this is not only an opportunity to get a new vehicle but it is an opportunity to improve your credit rating by making all your payments on time and increasing your credit score.

So regardless of your financial situation today, once you obtain your new car loan and make a consistent effort to pay off on time you'll have achieved two goals. The first is that new car, and the second is improving your credit score.

Of course, all of this would be unnecessary if you took public tranist or car pooled!