Sometimes it pays to know
Sometimes it pays to know
November 9, 2012
I never have cash on me. I always pay with a card. I even pay the $1.76 for my morning coffee with the shop’s rewards card.
Cards, cards, cards – they’re everywhere!
Beyond not having to fumble to find change, some debit or credit cards offer the added incentive to earn points towards travel, electronics, groceries and even movie passes. It can be a pretty sweet deal, if I do say so myself.
Movie passes aside, this wouldn’t be a very useful blog post unless I made sure to give you some important facts and tips to keep in mind when it comes to your spending habits. Let me put it this way, "It pays to know."
It pays to know about debit transactions:
I went to the bank a few months back and was told I paid over $30.00 in fees for debit transactions in one month. Say what? No, seriously. The teller immediately switched my account over to one that’s more debit-friendly. Depending on your plan, each of your transactions may actually be costing you money! Check with your bank to make sure you’re on the plan that’s right for you. Some banking institutions also offer lower fees to students and some don’t have any fees at all.
It pays to know about ATM Fees:
If you’re withdrawing money, try to avoid going to ATMs that are not owned by your bank. You may get charged up to $8.00 to withdraw money. Imagine if you’re quickly taking out $20.00 – suddenly that turns into $28.00. It’s not a huge deal, but can add up fast!
It pays to know about credit cards and interest rates:
While some credit cards allow you to accumulate points for rewards like travel or merchandise, you should be aware that these cards usually come with much higher interest rates. If you carry a balance on your credit card from month-to-month, you are actually paying a lot in interest to earn those points. The best way to take advantage of reward credit cards is to stick to your monthly spending budget and pay off your balance each month.
It pays to know about saving:
Recently, to make my debit-addiction more guilt-free, I signed up for this automated savings plan where every time I use my debit card, $0.50 from my checking account is transferred to my savings account. It’s a sneaky way to increase your savings without even really trying. I would still recommend a more rigorous savings plan, but any bit can help, right?
Do you have a good tip for saving while using cards? What else does it pay to know?
Comments
Denis says,
November 22, 2012
If your account limits the number of transactions you can make at no additional cost, be aware of this number. Let's say it is 5 withdrawal per month. When you reach your 4th and 5th withdrawal, think ahead at possible necessary expenditures before month-end and withdraw an amount sufficient to cover these necessities. This will avoid any supplementary fees! (Using this approach, one must be disciplined to not spend the money on other items!) On a side note, begin RRSPs as young as you can. I started in my early 20's and I am really seeing the benefits now that I am in my early 40's!
Rob says,
Nice advice, Denis! Thanks for sharing. RRSPs are certainly a wise investment for youth to consider.
Sometimes we don’t think about limits on our ability to withdrawal and how that can end up costing us.
Thank you for your advice!
Rob
Alex says,
November 22, 2012
Look on the back of the card and you’ll see a logo or logos (Like Cirrus). This is true of your ATM card too. These logo's tell you which ATM's your card will be valid at. Then match them up with the logo's on the banks ATM machines. There is uulsaly a sign that says this ATM machine accepts these types of cards. Be careful about cash advances! Look at your most recent statement at the bottom of the first page. This is where you will see a breakout of the interest rates charged. There is an interest rate for normal charges and one for cash advances. Often the cash advance one is hig her. Also, be careful to pay off the card each month if you can. When you make a partial payment they will apply it to the outstanding charges first and the cash advances second. And since this interest rate is often higher it means that while you're paying down the charges interest keeps accumulating on the cash advances! Good luck to you!
Rob says,
Wow! Thanks Alex. Great feedback.
I had no idea that I could see which ATMs my card would be valid at on the back of my card. What a great suggestion.
Do you have any tips for youth on how to save?
Thanks again,
Rob