Money and finances.Debit and Credit Cards in Canada (2 of 2)

Source:www.psdgraphics.com

Continuing with what we saw last week, let´s talk about debit and credit cards.

When DEBIT is the Best Option:

• When the vendor o the other part needs the money inmediately. It is the fasted method of payment 
• When you want to control the amount of money you spend. You can use your card as much as you want, but only up the amount you have in your account. This way, you won´t have to pay interest for purchases made in the heat of the moment. 
• When you want the best exchange rate for a foreign currency. If you are planning a trip outside your country, you can exchange some money but the best way to save the fees the bank usually charges is to withdraval money from the ATM.

Source: www.mybudget360.com

When CREDIT is the best Option:

Credit cards are not for people with hard time managing their money. But sometimes, they can be a good election because you are usually more protected from identify theft, and disputes are resolved quickly without you having to pay to get your money back.

Situations to use credit over debit:

1.-Improve one´s credit rating. If you want to build your credit history, you should use your credit card. Debit card transactions are not usually reported to the major reporting agencies 

You will need your credit history for a lot of things you wouldn´t even think: i.e. get a monthly plan with a telephone company, ... so your strategy with your  credit card should be to make small purchases regularly and pay them off immediately. This shows the institution that gave you the card that you can responsibly pay back your credit balances

In Canada, having a strong credit history is really important — it can make it much easier to make important financial transactions in the future, specially for:

• Getting a mortgage for a house.
• Getting a loan for personal expenses.
• Getting good deals on new credit cards.

2.-Online purchases: It is much harder to get a refund using a debit card than if it is with a credit card

3.- Renting a car. Most major credit cards offer an auto rental collision damage waiver. In addition, several major car rental companies do not accept debit cards as a form of payment

4.- Travel related purchases.You may need a credit card when you make a travel reservation.  And some companies, give you insurance when you book a trip with your credit card.

5.- Rewards. Some credits cards give you points/cashback when you pay with them, and you can get items, shopping cards, miles to travel...  

If you want more information about cards and montly payments, visit: Credit card payment calculator tool

Think which is the best option for you and be careful with your credit!

Money and finances.Debit and Credit Cards in Canada (1 of 2)

source:www.versusbattle.com

Debit and credit cards, offer a way to access money without having to carry cash. They are accepted in most places and are a popular form of payment in Canada.

Debit cards are linked to your bank account (usually a checking account) and money is withdrawn from the account as soon as the transaction happens. You have to be sure you have sufficient funds in your account when you use direct payment.

They are usually free, and you can also withdrawn cash from the ATMs with them.

Credit cards offer a line of credit that is interest free if the monthly bill is paid on time. With most credit cards, you have to pay an annual fee, but you can collect some points/cashback when using them. 

Credit cards can be useful and convenient. In Canada, they are used to purchase almost everything, but it is easy to overspend and have to pay a very high interest rates.

There are many types of credit cards offered by financial institutions. To compare the features and the cost of them, go to: www.itpaysto know.gc,ca (financial consumer agency of Canada) and use the Credit card selector tool.

Make sure you understand all the terms and conditions: interest you must pay, how it is calculated, annual fee, minimum montly payment, how to make a complain if you have a problem with your credit card...

	Comparison
	debit card	credit card
concept	money is directly deducted from your account	You are using a line of credit
		you should pay in full unless you want to be charged with interest
monthly bill	no.	yes
asking for it	easy	depends on your credit, income…
limit	the amount you have in your account	Set by the bank. Depending your creditworthiness
interest	zero. It is your money what you are spending	If you don´t pay the full bill, you will have to pay high interest (+-19%)
credit history	It doesn´t affect. There is no credit here!	Payments can improve one´s credit rating

In next post, we will talk when debit /credit is the best option.

Take care!

Canadian Coins

Source: or2013

As you could see in the post Money and finances the coins in Canada, as as important as the bills.

Well, well, well if you were a person like me that hates coins, better watch them when you are coming to Canada.

Why they matter to you? Because they are essential to:

• pay laundry (in some of the residential buildings,laundry/dry machine are available, but they cost 1.75$ per load - exact change). I can count how many times I had to go to a convenience store to buy something in order to get coins of "quarter" (0.25$). 
• take buses (at least here in Saint John, Fredericton, Halifax) you need to have the exactly change. They may accept bills (paper money) but you will not get the change. Wellllll ..... I saw sometimes, and it happened with me, that the driver asked the person behind to give me my change and put the remain amount on the fee collection (in order to get your change will have to count with the driver niceness).
• it is great for tips in restaurants.
• pay the parkmetre, specially if your car will be parked for few minutes.

Besides the change for the laundry, in my first years here, my nightmare was really to remember the names of each coin. Yeahhh!! I remember going to the grocery store, and have the cashier telling me: "it is missing a dime", I would look confuse, and solution I showed all my coins and asked them to pick the right one.

Also a collector would get crazy here, because the Royal Canadian Mint makes them with different symbols (quarter or higher). 

Penny was taken from circulation, now it is souvenir. Interesting enough is that:

• The rounding is not done on single items but on the total bill of sale.
•  If the price ends in:

           - a one, two rounded down to 0

           - six, or seven it gets rounded down to 5

           -  and rounded up if it ends in three, four, eight or nine.

But you would pay the exact value, without rounding, if you pay with credit card.

Money and finances. Opening a Bank Account

Source:getsmarteraboutmoney.ca

If you are thinking about coming to Canada, you have to take into account that you will need some money to support you during your first months. There will be a lot of initial expenses while you settle and look for a job. You have to pay your accommodation, food, and buy household items. So.. let´s talk about money!

Currency: 

Canada´s official currency is the Canadian Dollar ($). There are 100 cents in a dollar. And all paper money is printed by the Bank of Canada in the same size, but each bill has a different colour as you can see in the picture below

Source:newcanadianmoney.ca

Before coming, you can change some money from your country to Canadian dollars. So, you will be able to pay for the things you will need from the moment you arrive. You can also exchange money after you arrive (i.e. in the airport, but it is usually more expensive) or you can get cash from automated banking machines using your foreign debit or credit card.  You should check with our bank which is the best option for you.

If you send money through the mail, do not send cash. Use a cheque or a money order.  

Banking:

Banks and credit unions, and "caisses populaires" are safe places to keep your money. To be safer, open an account in a finantial institution member of the Canadian Deposit Insurance Corporation. That means that the goverment insures the money in your account (up to a maximum of $100.000 per depositor or, in the case of joint deposits, per set of joint owners).

Source: Nane

Opening a Bank Account: 

Unlike in other countries, in Canada, you have the RIGHT to a personal account even if:

• you don´t have a job
• you do not have money to put in that account in the moment you open it.
• you have poor or no credit rating (we will talk about this in next posts)
• you have been bankrupt

You just have to go to the bank and show them 2 Identification items from the following list:

• A Canadian Driver´s licence
• a Social Insurance Number (SIN) card
• a provincial or territorial health insurance card
• a permanent resident car or a Citizenship and Inmigration Canada form.

if you don´t have two pieces of this list, you can show one and, 

• an employee ID card with a photograph from a known employer
•  a debit or credit bank card with your name and signature on it
•  a valid foreign passport

All documents must be originals. 

Important Tip: You don´t have to have a permanent address to open a bank account, but before opening a bank account you should go to the Provintial Services in order to get your Canadian identification.

Types of bank accounts:

1. Chequing accounts: They usually include a debit card and they allow you to write cheques. They usually are cheaper than other kind of accounts. You will need this kind of account if your employer uses payroll deposit. And that is the account you will use for your day to day banking needs.

2. Savings and investment accounts are helpfull if you want to save money.They give you more interest than the chequing accounts but, you are allowed to make only certain type of transactions or just a number or them per month. If you make more, it may be expensive.

If you want to know more about investments, or to be better informed before making important decisions about money, go to "ItPaysToKnow.gc.ca"

In next posts, we will talk about debit and credit cards and the importance of having a credit history 

Hope this is useful!