ReportWire

Tag: low interest credit cards

  • Credit card interest calculator – MoneySense

    [ad_1]

    Play around with our credit card interest calculator to calculate credit card interest and figure out how long it will take you to repay the debt. This tool can help you develop a plan to address your balance and avoid paying interest going forward.

    How to use the credit card interest calculator

    Our credit card interest calculator can help you figure out two key pieces of information: 

    • How much money you’ll pay in interest based on your current monthly payment
    • How many months it will take to pay off your credit card balance

    Start by inputting your credit card balance and your card’s annual percentage rate (APR). If you don’t know this number, log into your credit card account and pull up your card’s terms and conditions. 

    Next, decide if you want to see how much total interest you’ll pay based on your current monthly payment (and enter that amount) or specify your payoff goal in months to see how the total interest charges.

    How to calculate credit card interest

    Since interest is expressed as an annual percentage rate, card issuers take several steps to determine how much to charge each month. Here’s how you can figure out their method:

    1. Convert your APR to a daily rate. Most issuers charge interest daily, so divide the APR by 365 to find the daily periodic interest rate. Make sure you’re using the purchase interest rate (not the cash advance or balance transfer rate).
    2. Figure out your average daily balance. Check your credit card statement to see how many days are in the billing period. Then, add up each day’s daily balance, including the balance that carried over from the previous month. Once you have all the daily balances, divide the figure by the number of days in the billing period to find your average daily balance.
    3. Multiply the balance by the daily rate, then multiply the result by the number of days in the cycle. Now that you have all the details you need, multiply the average daily balance by your daily periodic interest rate. Then multiply that number by the number of days in the billing cycle. This shows you how much interest you’ll pay in a month.

    A quick example

    If you have a credit card with a $1,000 balance and 20% APR, your daily interest rate would be 0.0548%. Assuming you don’t add to the debt, you’ll be charged around $0.55 in interest every day. If there are 30 days in the billing cycle, you’ll pay $16.50 in interest for the month.

    How to avoid paying credit card interest

    When you get a credit card statement each month, you’ll see a minimum payment amount listed. This is often a flat rate or a small percentage of your balance (usually 3%), whichever is higher. 

    While it’s tempting to just pay the minimum payment your credit card issuer asks for, doing so guarantees you’ll be charged interest because you’ll be carrying a balance into the following month. 

    Instead, make a point of paying off your balance in full every month. Not only will you avoid paying credit card interest, but your card issuer will report these payments to the credit monitoring bureaus, which can boost your credit score. Plus, the cash back or rewards you earn with the card won’t be offset by the interest you’re charged, so you truly get more out of using your card.

    How to reduce credit card debt

    If you already have a credit card balance, don’t despair. There are strategic things you can do to get out from under credit card debt.

    1. Negotiate with your credit card provider

    As a first step, call your bank or credit card provider to request a lower interest rate. Your card issuer may be willing to work with you, so don’t hesitate to ask. They might agree to lower your rate, offer to switch you to a lower-interest card, or create a repayment plan that works for your situation—but you’ll never know if you don’t ask.

    Article Continues Below Advertisement


    2. Make a budget and pay with cash or debit

    It’s important to honestly track your income and expenses so you can trim unnecessary costs. Stop charging purchases to your credit cards and switch to cash or debit, instead.

    While it might seem difficult, try to contribute to an emergency savings fund. If an unexpected expense comes up (like an appliance repair or vet bill), you can pull from your fund rather than charge it to your credit card.

    3. Open a balance transfer credit card

    If you have significant debt, find a balance transfer credit card with a great promotional rate. Then, move your existing balance to the card. You can quickly pay down the balance while you’re not being charged interest. The golden rule of balance transfer cards: never charge new purchases to the card.

    Canada’s best credit cards for balance transfers

    4. Try the avalanche or snowball repayment strategy

    There are two main approaches to paying off debt:

    • Avalanche method: Focus on paying off the debt with the highest interest rate first, while making only the minimum payments on your other accounts. Once the highest-interest debt is paid off, move on to the next-highest-interest debt.
    • Snowball method: Start by paying off the debt with the smallest balance first, while continuing to make minimum payments on your other debts. After clearing one debt, move to the next-smallest balance. This method may cost more in interest over time, but it can provide strong motivation and momentum to stay on track with debt repayment.

    5. Work with a credit counselling agency.

    It’s completely understandable to feel overwhelmed by your credit card debt, which is why a credit counsellor can be so helpful. Speak to representatives from your financial institution, a credit counselling agency, or a debt consolidation program to discuss your options. They can help you create a tailored plan to resolve the situation.

    5. Consider debt consolidation.

    If you’re juggling multiple loans and credit card balances and having trouble paying them off, it may make sense to consolidate your debt. This means combining two or more debts into one, with just one payment to make each month.

    Another option is a debt consolidation loan from a bank or other financial institution. Or you could work with a credit counselling agency to negotiate a debt consolidation program (DCP) or consumer proposal (repaying only part of your debt) with your lenders.

    Learn more about each of these options by reading “How to consolidate debt in Canada” and “Who should Canadians consult for debt advice?”

    [ad_2]

    Jessica Gibson

    Source link

  • The best credit cards for seniors in Canada in 2024 – MoneySense

    The best credit cards for seniors in Canada in 2024 – MoneySense

    [ad_1]

    featured

    Amex SimplyCash

    go to site

    Annual fee: $0

    Welcome offer: earn a $10 statement credit for each monthly billing period in which you make at least $300 in purchases (for a total value of up to $100).

    go to site

    Card details

    Interest rates 21.99% on purchases, 21.99% on cash advances
    Income required None specified
    Credit score 725 or higher

    Best cash back card for seniors

    At a glance: If you don’t mind paying an annual fee, you can boost your cash back earnings and get a host of extras and perks to boot. For $120 annually, the Scotiabank Momentum Visa Infinite offers attractive earn rates on groceries and recurring bills, and transportation (public transit and gas). Redemptions are simple, and there’s even a first-year fee waiver.

    featured

    Scotiabank Momentum Visa Infinite

    go to site

    Annual fee: $120

    Welcome offer: earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). No annual fee in the first year, including on additional cards. Offer ends October 31, 2024.

    go to site

    Card details

    Interest rates 20.99% on purchases, 22.99% on cash advances, 22.99% on balance transfers
    Income required Personal income of $60,000 or household income of $100,000
    Credit score 725 or higher

    Best credit card for travel insurance for seniors

    At a glance: Many credit cards don’t offer travel insurance to card holders over 65 years of age but with the National Bank World Elite, seniors are covered for up to 15 days when traveling out of province, right up until the age of 76.

    featured

    National Bank World Elite Mastercard

    go to site

    Annual fee: $150

    Welcome offer: earn no welcome bonus at this time.

    go to site

    Card details

    Interest rates 20.99% on purchases, 22.49% on cash advances, 22.49% on balance transfers
    Income required Personal income of $80,000 or household income of $150,000
    Credit score 760 or higher
    Point value 1 point is worth $0.01 when redeeming using National Bank’s À La Carte Rewards Plan.

    Best drug store credit card for seniors

    At a glance: If your drug store is Shoppers Drug Mart/Pharmaprix, there’s no better card than the PC Financial World Elite Mastercard (and if you shop elsewhere, this card just might convince you to switch pharmacies). PC Optimum is one of the most straight-forward loyalty programs out there, with simple, at-register redemptions at a rate of $10 for 10,000 points and numerous opportunities to earn—all in a no-fee card.

    PC Financial World Elite

    VISIT PCFINANCIAL.COM FOR MORE DETAILS

    Annual fee: $0

    Welcome offer:

    VISIT PCFINANCIAL.COM FOR MORE DETAILS

    Card details

    Interest rates 21.99% on purchases, 22.97% on cash advances (21.97% for residents of Quebec), 22.97% on balance transfers
    Income required Personal income of $80,000 or household income of $150,000
    Credit score 560 or higher
    Point value 10 PC points = $0.01 at Loblaws grocery network and Shoppers Drug Mart.

    Pros

    • Those who shop regularly at Loblaws, Shoppers Drug Mart, and Esso can really rack up the PC Optimum points without paying an annual fee.
    • Includes travel emergency medical insurance of up to $1 million, and rental car collision/loss damage waiver.
    • World Elite Mastercard benefits like Travel Pass, Travel Rewards, and Priceless are included.
    • The PC Optimum program is simple to use with seamless earnings and redemptions.

    Cons

    • This card is less-than-average for those who shop in stores outside the Loblaws ecosystem.
    • The included insurance is substandard for a premium card. Travelers, especially those over 65 years old, will need to buy extra coverage.
    • The personal income requirement of $80,000 (or household requirement of $150,000) will exclude some, and while those applicants can apply for a lower-tier PC Financial Mastercard, they’ll also get fewer rewards.
    • You must spend at least $15,000 annually on your card to retain it. Those who don’t will be downgraded to lower-tier PC Financial card.

    Best credit card for seniors on a budget

    At a glance: Earn Walmart Rewards dollars at a rate of 1.25% on purchases made at Walmart in-store or online, and 1% anywhere else. Every Walmart Rewards dollar is worth $1 against anything you buy at Walmart, and you only need a minimum of five Walmart Rewards dollars to redeem.

    Walmart Rewards Mastercard

    Visit walmart.ca for more details

    Annual fee: $0

    Welcome offer: This card does not have a welcome offer at this time.

    Visit walmart.ca for more details

    Card details

    Interest rates 19.89% on purchases and 22.97% on cash advances
    Income required $12,000
    Credit score 660 or higher

    More of Canada’s best credit cards:



    About Keph Senett


    About Keph Senett

    Keph Senett writes about personal finance through a community-building lens. She seeks to make clear and actionable knowledge available to everyone.

    [ad_2]

    Keph Senett

    Source link

  • BMO Preferred Rate Mastercard review – MoneySense

    BMO Preferred Rate Mastercard review – MoneySense

    [ad_1]

    With BMO as the card issuer, the Preferred Rate Mastercard is also ideal for those who prefer keeping all their accounts with a single provider, or who like their card to be affiliated with one of the big banks.

    featured

    BMO Preferred Rate Mastercard

    go to site

    • Annual fee: $29
    • Interest rate: 13.99% on purchases
    • Welcome offer: You can earn a 0.99% introductory interest rate on Balance Transfers for 9 months with a 2% transfer fee.
    • Annual income requirement: $15,000 (personal or household)

    go to site

    4 things to know about the BMO Preferred Rate Mastercard

    1. It has a low interest rate

    Why is this card popular? It’s simple math. Most cards charge around 19.99% in interest. With a regular rate of 12.99%, the BMO Preferred Rate is automatically saving you 7% annually in interest on unpaid balances  compared to the average credit card. Depending on how much debt you carry, this could add up to hundreds of dollars annually. Even better, this rate applies across the board to balance transfers and cash advances as well.

    2. You can transfer balances from higher-interest cards

    With the low interest rate as its marquee feature, this card is aimed towards people trying to reduce their credit card payments. That’s why the 0.99% introductory rate on balance transfers for a full 9 months is such a bonus. New cardholders can transfer debt from higher interest cards and be charged 0.99% for 9 months (a 2% transfer fee applies so, for example, if you transfer $5,000 from another card, you’ll have a $50 transfer fee added to your balance). When the balance transfer offer period is over, any remaining debt will incur interest at 12.99%, a rate that’s still far lower than most cards.  

    3. It offers few frills 

    It’s not unusual for low interest cards to be a little lean when it comes to perks. That said, the BMO Preferred Rate Mastercard does come with purchase protection and extended warranty, both of which can help add some peace of mind when you’re making day-to-day purchases.

    4. The big bank advantage

    As a BMO card, the Preferred Rate Mastercard is a good choice if you’re looking to keep things simple by maintaining all your accounts and credit card with a single provider.

    Are there any drawbacks to the BMO Preferred Rate Mastercard?

    While the BMO Preferred Rate offers a very competitive low interest rate, stronger alternatives can be found outside of the Big Five banks. When looking at the competition in this category, it’s wise to compare the regular interest rates, annual fees and balance transfer offers. Some cards, like the MBNA True Line Mastercard, may be a better option for you. 

    Should you apply for the BMO Preferred Rate Mastercard

    If you’re looking for a low interest card from an established bank, the BMO Preferred Rate Mastercard is a good option. If you’re searching for the absolute lowest rates, balance transfer offers and annual fees, however, you might find something that suits you better. Check out our review of Canada’s best low interest credit cards to aid in your decision.

    featured

    RBC Cash Back Preferred World Elite Mastercard

    go to site

    • Annual fee: $99
    • Earn rate: 1.5% back on all your purchases
    • Welcome bonus: You can earn unlimited cash back, no limit to what you can get back
    • Annual income requirement: Personal income of $80,000 or household income of $150,000

    go to site

    Morre about credit cards:

    What does the * mean?

    Affiliate (monetized) links can sometimes result in a payment to MoneySense (owned by Ratehub Inc.), which helps our website stay free to our users. If a link has an asterisk (*) or is labelled as “Featured,” it is an affiliate link. If a link is labelled as “Sponsored,” it is a paid placement, which may or may not have an affiliate link. Our editorial content will never be influenced by these links. We are committed to looking at all available products in the market. Where a product ranks in our article, and whether or not it’s included in the first place, is never driven by compensation. For more details, read our
    MoneySense Monetization policy.



    About Keph Senett


    About Keph Senett

    Keph Senett writes about personal finance through a community-building lens. She seeks to make clear and actionable knowledge available to everyone.

    [ad_2]

    Keph Senett

    Source link

  • Benefits, fees, hidden perks: Choosing the right credit card for your lifestyle – MoneySense

    Benefits, fees, hidden perks: Choosing the right credit card for your lifestyle – MoneySense

    [ad_1]

    “They will do all the comparisons for you, across all the different providers, and you can organize a list based on: I prioritize Air Miles, I prioritize cash back, I prioritize low interest rates,” Marques said. 

    “They’ll compare all the providers with best in class in those categories, and show you their current rates, their current signup offers, et cetera.”

    As for younger consumers, Marques said low interest rates aren’t typically a priority, assuming you aren’t already managing a lot of credit card debt and you’re not transferring a balance.

    Instead, travel rewards and cash back from your favourite retailers are likely the biggest returns on your spending, she said. Options with no annual fees are also valuable for someone just starting out, although there will be fewer rewards.

    Can you negotiate with credit card issuers?

    When getting a new card, there isn’t much room for negotiation, Terrell said—what you see is what you get. If you want different or better perks, the provider will just point you to another card that offers them.

    Negotiations come into play if you already have debt, Marques said, or are transferring debt between cards to take advantage of the lowest rate. 

    Using signup offers—such as zero interest for the first 12 months—with a balance transfer means you can get a break from interest and pay down your balance faster, she said. Or if you want to keep your current card, you can simply call your provider and move your balance to a lower-interest option.

    “There is an opportunity to negotiate their interest rates or even negotiate on your annual fees,” Marques said. “I think a lot of consumers don’t realize that if you just call and ask … in a lot of cases, they will.”

    [ad_2]

    The Canadian Press

    Source link