That title was hard to come up with... HAHAHA! I'm sooo funny! But anyways, it's time for RRSPs! Some of you may have been listening to Cfun 1410 when I made the absolutely horrible mistake of saying it's bad to borrow for your RRSPs. Well, it's not always! I just assumed that, where there is debt, there is bad interest...
But not for RRSPs! As many of you may know, the government doesn't tax savings you put into a RRSPs, unlike all other loans. So because of this, you make more money. And also, interest rates on RRSP loans are one of the cheapest forms of loans, so what you make off of putting money into an RRSP can totally defeat what you are paying for it! So in this way, you can make a lot of money, without making a cent! But remember, in the end you have to pay off that debt anyways. So even though that loan can indeed become an asset, it is a liability at the same time.
RRSPs are important to contribute to in any way you can because it's such an important retirement tool. So while it's good to borrow for an RRSP donation, it's even better to not only borrow, but use your own money as well! Because you know what they say. A lot is better than nothing!
Showing posts with label Credit and Loans. Show all posts
Showing posts with label Credit and Loans. Show all posts
3.01.2007
2.15.2007
Guest Post: Credit Card Report Card
Hi. Munnybagz has been really sick for the last two days and he is sorry he has not been able to update his blog. He asked me to add a post for him. Seeing as how he was asked about credit cards on his radio interview with 1410 CFUN, I thought I would blog about credit cards.
Just like you need a good report card history to get into university, you need a good credit card history to be able to get money loans from the bank. But the only way to get a good "credit rating," as it is called, is to borrow money. So how do you borrow money without having a good credit history that lets you borrow money? You get a credit card.
Credit cards are given to students who don't have any history of having credit. These cards often have low limits. For example, someone who has over 10 years of a good credit rating may be able to have credit cards with $10,000 limits AND be able to get a $200,000 mortgage AND be able to get a $15,000 car loan... all at the same time. A student might only be able to get a credit card with a $2,000 spending limit on it.
Once you get a credit card, use it wisely, and pay it off every month, you will start to develop a good credit rating. Then the bank will know you are safe to lend more money or credit too. Eventually, your credit card limit will increase and you will be able to qualify for other loans, like a mortgage, a car loan, or a business loan. If you don't ever start your credit history the bank won't lend you the money when you are ready to buy your first home - just like the university won't let you in if you don't have your high school report cards.
BUT credit cards have very high interest rates and can end up costing a lot of extra money and stress if not used properly. Never put more on your credit card than you can pay off when the bill comes. You don't want a D- on your credit card report card. For more on Credit Cards from Munnybagz see Hey Kids - Do You Still Want a Credit Card?
Just like you need a good report card history to get into university, you need a good credit card history to be able to get money loans from the bank. But the only way to get a good "credit rating," as it is called, is to borrow money. So how do you borrow money without having a good credit history that lets you borrow money? You get a credit card.
Credit cards are given to students who don't have any history of having credit. These cards often have low limits. For example, someone who has over 10 years of a good credit rating may be able to have credit cards with $10,000 limits AND be able to get a $200,000 mortgage AND be able to get a $15,000 car loan... all at the same time. A student might only be able to get a credit card with a $2,000 spending limit on it.
Once you get a credit card, use it wisely, and pay it off every month, you will start to develop a good credit rating. Then the bank will know you are safe to lend more money or credit too. Eventually, your credit card limit will increase and you will be able to qualify for other loans, like a mortgage, a car loan, or a business loan. If you don't ever start your credit history the bank won't lend you the money when you are ready to buy your first home - just like the university won't let you in if you don't have your high school report cards.
BUT credit cards have very high interest rates and can end up costing a lot of extra money and stress if not used properly. Never put more on your credit card than you can pay off when the bill comes. You don't want a D- on your credit card report card. For more on Credit Cards from Munnybagz see Hey Kids - Do You Still Want a Credit Card?
1.09.2007
Hey Kids- Do You Still Want a Credit Card?
Aren’t we in such a wonderful age? Quickly pay for things with a credit card! Never again will you need to save to get something. Now you can buy it and THEN pay for it! Right? Wrong! Credit cards are the real thieves of the money world! People who don’t understand credit cards can go over 100,000 dollars in debt! You need to understand that one thing a credit card is not is free money. And they are also the jewel in the sand! When it comes to interest rates, that is.
Did you realize that credit cards can charge up to 28 percent interest? If you have 100,000 dollars in debt, thats 28,000 dollars you’re paying to the bank just because of your wild spending habits! Now I know that some people out there have good spending habits. Only buying things when they know they have the money. But it’s just plain old unfair for those who save before they spend. With all these rewards you get for using your credit cards, like air miles, or don’t pay until 2008. What rewards do people get for saving their money that aren’t self-earned? It’s kind of like how someone gets praised for quitting smoking, whereas the person who should be getting praised is the one who never started.
If you’re about to give a kid a credit card, you’ll be damned if you charge it to you’re account. As long as it’s not their money they’re spending, they don’t really care how much they spend, or how much more you have to pay then what they bought costs.
Did you realize that credit cards can charge up to 28 percent interest? If you have 100,000 dollars in debt, thats 28,000 dollars you’re paying to the bank just because of your wild spending habits! Now I know that some people out there have good spending habits. Only buying things when they know they have the money. But it’s just plain old unfair for those who save before they spend. With all these rewards you get for using your credit cards, like air miles, or don’t pay until 2008. What rewards do people get for saving their money that aren’t self-earned? It’s kind of like how someone gets praised for quitting smoking, whereas the person who should be getting praised is the one who never started.
If you’re about to give a kid a credit card, you’ll be damned if you charge it to you’re account. As long as it’s not their money they’re spending, they don’t really care how much they spend, or how much more you have to pay then what they bought costs.
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