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Use your Credit Card Wisely

When you make a credit card purchase, it’s actually your C aisse populaire that pays for your store purchase. Then, it’s up to you to reimburse your Caisse populaire.

Use your card wisely by following the tips listed below and you’ll only enjoy the advantages of credit.

Advantages

A credit card lets you:

  • discount items immediately
  • make major purchases (instead of keeping $100 or $200 on you)
  • cover unexpected expenses (e.g., scooter repairs)
  • enjoy an interest-free loan as long as you pay your monthly balance
  • make online and over-the-phone purchases
  • build a good credit report, if you use your card properly

Drawbacks

A credit card comes with certain dangers or drawbacks. For example, you might:

  • get excessively indebted and lose control of your finances
  • give in to temptation and buy items that wouldn’t have bought if you didn’t have a card
  • pay high interest if you don’t pay on time
  • as is often the case, pay an interest rate higher than that of other types of loans (personal loans, lines of credit, etc.); it’s the most expensive form of credit (if you don’t use it wisely!)
  • pay annual fees (choose a card with no annual fees)

User tips

  1. If you don’t have any money today, you probably won’t have any money to pay your bill when it comes in. If that’s the case, avoid using your card.
  2. Pay your card balance before or on the deadline written on your card statement. This way, you’ll avoid paying high credit charges.
  3. List your credit card purchases. You will have a better idea of the balance payable at the end of the month and, by the same token, you can make sure you have the necessary amount. You can get a list of your purchases in AccèsD.
  4. Stay within your credit limit and don’t ask for an increase while in school.
  5. Check your account statement and compare it with your receipts to make sure that you’re the one who made all the purchases listed on the statement. If you don’t recognize even one of the purchases listed, call the number indicated on the back of your card right away; perhaps your card was cloned.
  6. Be the only one to use your credit card and never reveal your personal identification number (PIN).

Exemple

Good use of a credit card

  • Steve charged $520 to his credit card this month.
  • Steve got his statement.
  • Steve paid his credit card balance ($520) in full before the deadline.
  • The following month, Steve bought for $400 with his card.
  • His new statement is of $400.
  • Steve isn’t worried. He’s in total control of his finances.

Bad use of a credit card

  • Mat charged $520 to his credit card this month.
  • Mat got his statement.
  • Mat had the money to pay his card balance, but he decided to use that money to buy a new TV. He paid the minimum amount on his credit card, i.e., $20.
  • The following month, Mat bought for $400 with his card.
  • His card statement is of $900 plus interest on the 1st $500 which will be late.
  • Mat is worried. He’ll have to delay his payment, and a credit charge will be added to his balance. So, the total cost of his purchases will actually be $1,000 instead of $920.

Did you know?

You’ll be able to apply for your 1st credit card at 18. In the meantime, your parents can apply for a credit card for you. But keep in mind, they’ll have to pay your card balance if you don’t, and that could affect their credit file.

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