Personal Finance
Better Finances for a Better You
Topic: "Debt"
← Curating the web to find the most interesting and helpful
information about your money.
Quote of the week
"This would be a much better world if more married couples were as deeply in love as they are in debt."
- Earl Wilson
Word of the week
Cash Advance
A cash advance is when you take money out of your credit card account. Cash advances are expensive as card issuers usually charge high interest rates and fees and restrict the amount you can withdraw to a part of your whole credit limit.
25 key terms everyone with a credit card should know by Alexandria White →Serious stuff
Making financial decisions – including around budgeting, taking out loans or investing – can be daunting, and many college students feel ill-equipped to do so.
Financial Literacy: What College Students Need to Know by Sarah Wood →Word of the week
Predatory Lending
Beware of predatory lending, which involves falling for high-interest loans and deceptive lending practices. To avoid becoming a victim, make sure to do your research and compare loans from different lenders. It's important to steer clear of high-interest loans, especially those with interest rates that increase faster than you can repay them. Before signing any loan agreements, make sure you understand all the terms and conditions for repayment.
Canada's new laws target predatory lenders →Infographic of the week
The Challenge That Financial Vulnerability Brings to Canadians
Financial vulnerability and financial stress are mainstream issues affecting Canadians of all income levels and in particular more vulnerable populations.
Free Financial Resilience Score Tool →Budgeting
5 common credit mistakes you should avoid in your 20s by Megan DeMatteo 1) Spending without a plan 2) Using debit over credit 3) Waiting to establish credit 4) Not understanding key terms 5) Getting store cards on a whim
It can be hard to get your finances together in your 20s, learn how avoid common credit mistakes →Saving
5 Unnecessary Bills You Should Stop Paying in 2024 Written by Crystal Mayer
Here are the five unnecessary bills you should stop paying →Saving
How to save money when you're broke
Monique White has a few ideas. She's a credit counselor and the head of community at Self Financial, Inc. →Word of the week
Penalty APR
When you make a late payment, card issuers have the right to penalize you with a penalty annual percentage rate (APR) that is greater than your standard APR.
Start planning to pay off your credit card with our credit card payoff calculator →Did you know?
At the end of 2023, the average credit card debt per borrower was $6,360, or about 10% higher than the year before—ushering in an all-time high
Credit Card Statistics And Trends →Word of the week
Prime Rate
The best interest rate that lenders charge customers is known as the prime rate, or prime lending rate. It's possible that your credit card's real interest rate is higher than the prime rate. Variable APRs frequently fluctuate in tandem with changes in the prime rate. It follows that your variable APR will probably increase if the prime rate does, and vice versa.
Here’s a breakdown of the most common personal finance terms →Did you know?
US credit-card delinquency rates were the highest on record in the fourth quarter of 2023, according to a Federal Reserve Bank of Philadelphia report.
Use our free Credit Card Payoff Calculator to find out how fast you can be debt-free →Word of the week
Purchase APR
Purchase APR, which can be fixed or variable, is the interest rate applied by credit card companies to new purchases you make on your credit card when you don't pay off your full balance.
Learn more about Purchase APR and how it impacts you →Did you know?
Members of Generation X have the highest average credit card debt at $7,155, followed by baby boomers and millennials, according to credit bureau Experian’s latest consumer findings.
Experian Study: Average U.S. Consumer Debt and Statistics →Word of the week
Balance Transfer APR
A balance transfer APR (Annual Percentage Rate) is the interest rate you'll pay on balances you transfer balances from one credit card to another. Some credit cards offer a promotional balance transfer APR. You may be eligible to receive one of these promotional offers when you transfer credit card debt to their card from an existing credit card.
Best balance transfer credit cards of April 2024 →Word of the week
Annual Fee
The annual levy imposed on credit card holders. The first year's yearly charge may be waived for some cards.
Use our free Credit Card Payoff Calculator to find out how fast you can be debt-free and how much you'll save →Word of the week
Balance Transfer
Transferring debt from one credit card to another with an introductory 0% APR for a predetermined amount of time—typically six to 21 months—is known as a balance transfer. Balance transfers give you extra time to pay off debt and can result in interest savings. Be aware that you cannot move balances from one card to another issued by the same bank.
11 best balance transfer cards with 0% APR of April 2024 →Did you know?
The word "mortgage" comes from the old French phrase "mort gaige." Literally translated, mort gaige means death pledge. Once the mortgage is paid off, the loan dies.
10 Weird Facts About Home Mortgages →Saving
Credit scores determine whether you can get a mortgage, credit card, auto loan and more. So if your score is subprime, how do you bump it up to above a 700?
NPR Life Kit on Effective ways to repair your credit score →Word of the week
Billing Cycle
A billing cycle is the interval of time between the last statement closure date and the subsequent date is known as a billing cycle. The CARD Act stipulates that billing cycles must be at least 21 days long.
What Is a Billing Cycle and How Does It Impact Credit Score? →Did you know?
U.S. consumers owe a record $1.129 trillion on their credit cards, and the average American credit card debt is $6,501.
Use our free Credit Card Health Check to see your credit utilization ratio and plan for a brighter future →Word of the week
Avalanche Method
With the avalanche debt payoff strategy, you focus on repaying debts based on their interest rates. This method prioritizes interest rates and paying off debt with the highest interest rate first. You move on to the next highest interest rate debt after the first is paid off. This helps you pay less interest over time.
Strategies for Paying Off Debt Faster →Serious Stuff
Total Credit Card Debt Reaches $1 Trillion: 5 Ways to Get Out of Debt by Evelyn Waugh
Here are 5 steps to get out of debt:
- List everything you owe
- Decide how much you can pay each month
- Reduce your interest rates
- Use a debt repayment strategy
- Avoid new debt
Serious stuff
Jessica Lutz @ Forbes: How I Worked Through My Financial Baggage And Got Serious About Saving Money
This is all temporary and you can figure it out →Serious Stuff
8 steps to helping children build good credit from Megan DeMatteo at CNBC Select
- Start early
- Teach the difference between a debit card and a credit card
- Incentivize saving
- Help them save early for a secured credit card
- Co-sign a loan or a lease
- Add your child as an authorized user
- Have them report all possible forms of credit
- Encourage them to apply for a student card
Word of the week
Snowball Method
The snowball repayment method consists of listing all your debt balances and tackling them from smallest to largest depending if the interest rates are the same. This method prioritizes balances as you move on to the larger ones next. This helps build momentum and motivation by settling debts faster.
Explore different strategies for paying off debt faster and how you can utilize our debt payoff calculators →Serious Stuff
The 6-step method that helped a 34-year-old pay off $30,000 of credit card debt in 1 year
Step 1: Survey the land
Step 2: Limit and leverage
Step 3: Automate your minimum payments
Step 4: Yes, you must pay extra and often
Step 5: Evaluate the plan often
Word of the week
Savings Ratio
This ratio indicates how much a person should save for their future objectives. Savings / Gross Income is the savings ratio. Gross income is the total of all earnings, including bonuses, dividends, interest, royalties, rent, and money received from a business or profession.
Neontra automatically calculates your personal savings, expenses and debt ratios →Infographic of the week
Holiday Survival Guide
The winter holiday shopping season is the most expensive time of year for most households. This year, spending is expected to be even higher due to rising prices. This infographic helps you start planning to shop and save for the 2023 holiday season.
How to plan and save for the 2023 holiday shopping season →Serious stuff
A third of American adults go into debt to pay for holiday shopping
NPR's Asma Khalid speaks with LendingTree Chief Credit analyst Matt Schulz about why that happens →Word of the week
Co-Borrower
When two people apply for a loan or credit line together, they are known as co-borrowers. The money associated with the loan are equally accessible to the co-borrower. Payment obligations fall on both the principal borrower and the co-borrower. A common example of this is a married couple that applies for a mortgage or auto loan together.
What Is a Co-Borrower? Role in Loan Documents and Vs. Co-Signer →Budgeting
6 expert tips to help you create a holiday budget you can live with
Select spoke with money experts for their best advice on how to stay on track →Did you know?
According to Sallie Mae’s How America Saves For College, families reported spending an average of $28,026 on college in the academic year 2022-23, an 11% increase from $25,313 in 2021-22.
How America Pays for College 2023 →Word of the week
Collateral
Capital or asset pledged to a bank or other lender in the event that the borrower is unable to make all of the repayment instalments on a loan.
Collateral Definition, Types, & Examples →Word of the week
Creditworthiness
The term "creditworthiness" describes the degree of a lender's trust in a borrower's capacity to return a loan. The borrower's creditworthiness is mostly based on how successfully they have handled their prior financial commitments.
Discover how long it would take to pay down your credit card with our free credit card payoff calculator →Infographic of the week
Ranked: Median Student Debt for a U.S. College Degree
According to the Federal Reserve, student loans added up to $1.6 trillion in Q2 2023, making them the third largest category of U.S. household debt behind auto loans ($1.8 trillion) and mortgages ($12 trillion).
The Visual Capitalist ranks student debt by U.S. college degrees →Saving
A shame-free guide to digging out of debt
NPR Life Kit: In this episode, they offer shame-free solutions for digging out of debt →Did you know?
According to the latest figures from Experian, the average American has 3.84 credit cards with an average credit limit of $30,365.
Don’t let credit cards rule your life. Use our free credit card pay down calculator to help you plan for a brighter future →Did you know?
In 1950, Diners Club introduced the first payment system resembling a credit card. This wasn't a real credit card, though. It was a charge card instead, and the cardholder was expected to pay the whole debt each month.
Use our credit card payoff calculator to help you plan for a brighter future →Word of the week
Amortization
The amortization period is the length of time it takes to pay off a mortgage in full. The amortization is an estimate based on the interest rate for your current term.
Learn more on how your amortization period affects your costs →Word of the week
Credit Limit
The most you can spend with your credit card is determined by your credit limit. When you first receive a credit card, the issuer sets your limit. You can request a decrease or increase.
What Is a Credit Limit? How It's Determined and How to Increase It →Word of the week
Credit Utilization Ratio
A comparison of your available credit to how much you have actually utilized. A good credit score can be attributed to a low utilization ratio. The ideal target is to use 30% or less of your available credit.
You can view your personal ratio with our Health Check →Serious Stuff
How to deal with money struggles during a financial crisis:
Navigating a financial crisis can be overwhelming.
- How do you decide what expenses should be prioritized?
- Should you tap into your retirement accounts?
- What about asking friends or family for financial help?
- Should you apply for a payday loan?
The first step of creating your emergency plan is understanding your essential needs.
Word of the week
Overdraft
An overdraft occurs when you do not have enough money in your bank account to cover a payment or withdrawal. These transactions may include: - Debit purchases - Bill payments and pre-authorized debits - Cheques - Withdrawals - Transfers between bank accounts
Learn more about getting overdraft protection →Word of the week
FICO
The three-digit FICO Score, or a Beacon Score, determines whether your credit is good or bad. Fair Isaac & Company, also known as FICO, is a US-based business that sells Equifax and TransUnion Canada their unique rating system. When you apply for credit, lenders can quickly and reliably learn details about your finances thanks to the FICO Score.
Getting your credit report and credit score →Word of the week
Credit
Credit is money that you may borrow from someone (like a bank or credit card company). You must consent to repaying them on a predetermined timeline, typically with interest, by signing an agreement. The four basic types of credit: - Revolving credit - Charge credit - Instalment credit - Service credit Each serves a different purpose and works in a different way.
Learn more about credit and why credit scores are important →Did you know?
Credit card and auto loan missed payments increased by 19% in the first quarter of 2023, according to Equifax, as Canadians struggled to keep up with rising living expenses and interest rates.
Don’t let credit cards rule your life. Our credit card paydown calculator will help you plan for a brighter future →Serious Stuff
Why you got into debt, and how to get out "Between massive mortgages, student loans, lines of credit and credit cards, a lot of us are struggling to pay what we owe and stressed about it."
Podcast: Why you got into debt, and how to get out →Word of the week
Cost of Borrowing
The total cost for you to borrow money. This includes the principal amount of the loan, interest, fees and any other costs associated with the loan.
Keep track of all your debt and the true cost of borrowing →Word of the week
Credit Score
"Your credit score is a three-digit number that comes from the information in your credit report. It shows how well you manage credit and how risky it would be for a lender to lend you money. Your credit score is calculated using a formula based on your credit report. Note that you: - get points if you use your credit responsibly - lose points if you have trouble managing your credit Your credit score will change over time as your credit report is updated."
Learn more about your credit score →← Curating the web to find the most interesting and helpful information about your money.