Credit Card: Friend or Enemy?

Are you planning to buy something? Among the payment choices that a person has, credit cards are considered to be one of the easiest ways to pay the bill. All that you need to do is to swipe the card and that’s it, but what about paying it off later? And if you don’t settle your credit card bills within the grace period, what about the accrued interest? There is a lot of management required if you have a lot of credit cards in your wallet. Credit cards can be your friend only when you know how to settle the bills within the deadline, but they can be your deadliest enemy if you don’t know how to monitor them. The more credit cards you have, the more pile of debt you’re going to tackle.

Credit cards are friendly, but any mismanagement with them can get you paying high interest rates. They are practically very helpful because you can use them anytime, anywhere, but their use is often unwise. If you set your financial plans and you know where and when a credit card can be the right choice for you, you’re going in the right direction. Setting up goals and plans can save you from making an unnecessary transaction. Not only do your financial plans support your future, but they can also save you from a stack of liabilities.

There are always merits and demerits of everything we choose to use. If there is a risk, there can be profits too. Likewise, if credit cards can put you in trouble, they sometimes can get you out of trouble too. They are helpful when any emergency knocks your door and can boost your purchases, which can be a con too. When your cash is readily available, you are willing to buy something unnecessary, which can increase your expenses, so you need to keep an eye out for that.

How to avoid credit card pitfalls?

There are few precautions that you need to bear in mind while using a credit card:

  1. Monitor your debts – You need to track your debts and keep a monthly check and balance on your credit card bills. It will help you stay away from high interests and taxes.
  2. Prepare a budget – You need to make a budget so that you can avoid additional expenses.
  3. Make an effort to stick to the plan – You need to stick to your financial plans and pay the bills within the grace period.
  4. Extra precautions – Always choose a reliable company to get a credit card. Moreover, keep an eye on your online purchases since they can deduct much more than you assume.
  5. Stolen cards – In case your credit card gets stolen, report the company as soon as possible.

Credit cards are easy to use but hard to manage. You can maximize your benefits by evaluating the pros and cons of using a credit card. If you avoid the cons, you are prepared to enjoy the advantages.

Top Financial Issues Facing Canada

The world now lives in the fear of financial crisis. The European Union, United States of America, all have been its victims. It is not different about Canada either. It is also struggling with financial problems. In the wake of recent events, here are the seven big Canadian financial issues.

First one of the seven is the fact that Canada’s deficit was 3.3% more than their gross domestic product. This is one of the worst readings in a developed country. This is also the highest reading in past 20 years. This has resurrected the fear of the era which saw Canada’s debt rate hit the bottom.

The second one is its lack of economic slack. Official estimate says that Canada’s output gap is minus 1.5 percent, which is smaller 5.9 percent of the demographically adjusted unemployment rate. Studies show that firms are now struggling to meet the demand of worker. This is not a good sign for the financial sector of the country. The country is going to struggle to keep up with the pace of other countries.

Next one is in the housing market. Despite the data says the housing market is actually doing very well, especially in the more popular centers like Kelowna BC, this is mostly due to the fact that Canadian’s offer cheap borrowing cost and are ready to provide ready access to credit. Only a few countries managed to get profit by using this combination.

The fourth worry is about household credit which has shrunk to two-thirds from its peak and is expected to go down further.

The fifth one is the fact that studies show Profit of Canadian corporate has fallen five of the seven quarters. Firms all around that are affected with the decline of commodity price and are now seriously considering their future investments. Canada too will be affected by this.

Canada’s poor competitiveness is the next problem. Unlike other countries, which were affected by the global financial crisis, where they were forced to hit the reset button, Canada managed to avoid such decision with the combination of stronger currency and inferior productivity growth. But now that has forced the cost of labor to raise up to 53% compared to The USA.

The seventh one is Canada’s trade market is on decline due to Canadian dollar fall and fall in commodity price