University students will often receive unsolicited and/or pre-approved applications for credit cards. Perhaps financial institutions specifically target students to apply for credit cards? It is a tempting offer for someone on a tight budget who needs the extra cash for books, pub night or a pizza delivery. The cards usually have a low limit of about $1000.00 so it is not a “big deal.”
However, banks are not targeting students to be “nice”. They want to be the one of the few credit cards that you have in your wallet because after you graduate and start your career the card limit can be increased. In the meantime, financial institutions rely on students only making small or minimum monthly payments on balances. Not only do students usually only pay minimum payments, they also don’t usually think about the extra interest they are paying on top of the original balance. In other words, financial institutions make more money from minimum payments each month. Be cautious, look at the interest rate and look beyond the advertised low introductory rate.
We live in a “plastic society.” There is nothing wrong with having a credit card for emergencies and for large cash purchases. Just make sure that you stay financially responsible, pay off your monthly balance every month and use credit wisely. Be financially responsible now and you will reap the financial rewards in the future.
Stay Financially Savvy.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.
Ways To Clean Up Your Credit Rating By: Leslee Mason
“You went on a spending spree that lasted two years. Now your credit rating is so bad even the public library turned you down for a card. Whatever the reason for your debt – a student loan, you lost your job or over used your credit cards- You’re not alone. It’s a situation thousands of Canadians, from all income brackets, experience each year. You can’t erase the past, but you can put those debts behind you and get on the road to credit recovery in as little as three years.”
Here’s How
1. Stop ducking your creditors.
“Don’t wait for a creditor to come to you. Always take the offensive position.” Advises Barb Godin, senior vice-president of consumer lending with The Bank of Nova Scotia.
Calling creditors to discuss reasonable ways of Re- paying your debt, especially in the early stages of financial trouble, can help maintain a good relationship. “Companies will often take smaller payments for a longer period of time while the individual deals with her financial circumstances,” says Gary Heatherington, senior vice-president and general manager of MasterCard International.
2. Go For Credit Counselling
“ People come to us because they’re falling further into debt and do not see any logical way out of the situation,” says Laurie Campbell, program manager with The Credit Counseling Service of Metropolitan Toronto. If you can’t reach a repayment agreement with your creditors or collection agencies, or the fear factor is too overwhelming, some credit counseling services offer no-cost/low-cost confidential help.
They’ll help you with budgeting and money management, give you a financial assessment and suggest ways you can handle your money, creditors and payments without getting further behind. For worst-case scenarios, they’ll deal with your creditors on your behalf.
“ We ask the creditors to reduce payments and stop interest,” says Campbell. Do they? According to Campbell, “Many of them are very cooperative about doing both,”
Getting help from a credit counseling service is nothing to be embarrassed about. “It’s further evidence that a person has a responsible attitude about their debt,” says
Heatherington. To find a service, Campbell stresses, “You should always look” not for profit “because you don’t want to pay high fees for a service when you’re already in financial difficulty.” For free budgeting booklet or information about help outside the Metropolitan Toronto area, call 1-800-267-2272. In Toronto call (416)-593-7434.
3. Read your credit report.
Whether you decide to tackle your debts on your own or with the help of a counseling service, you need to know how credit lenders perceive you. To do that, you need to get a copy of your credit report from Equifax Canada or Trans Union of Canada. Most derogatory information including bad debts or collections stay on your credit file for six years from the time of last activity. Creditors provide Equifax and Trans Union with information about how a person pays their bills. Equifax and Trans Union collects and assembles the information into a credit file, which is then used by credit lenders to help them decide whether or not to give you credit. Michel Globensky, assistant vice-president of administration and security with Equifax, suggests people get a copy of their report because, “The consumer should know exactly what is that Equifax has on file about them so they can be sure it’s accurate.”
The credit report takes four (4) weeks to arrive. It is easy to read and understand. When you get it, look through it carefully, and make sure the info is correct and up to date. If you find a mistake, fill out the form accompanying the credit report and return it to Equifax or Trans Union. The original information is still considered accurate until your comments are verified.
You can also ask that a statement be added to your file explaining your financial troubles.
Once your payments are under way, or have been made, get another copy of your report and make sure this has been reflected.
To get a free copy of your credit report call Equifax at 1-800-663-9980 or Trans Union at 416-593-7434.
4. Buddy up with your bank.
Since many of your finances are handled through a bank, demonstrating fiscal responsibility at one is crucial. Show the bank you can handle your income, expenses and chequing account with care. Don’t bounce cheques, and if you have overdraft protection, use it for emergencies only.
Save money by regularly putting even small amounts in your savings account (or an investment account if you have one.)
Even though you may not have a credit card, your ability to pay other bills such as cable, telephone, rent and utilities on time is an excellent way to re-establish a solid payment track record. Have a word with the assistant manager or the supervisor and make it known to them what you’re trying to do, says MasterCard’s Heatherington. Once you begin to build a reliable track record of paying bills on time, budgeting well and saving, you can approach your bank about a small loan or credit card.
If you’re confident that your days of debt are behind you, consider asking someone with a good credit history to be your guarantor for a bank loan. Beware: if you default, your guarantor is personally liable for the amount. “ If the debtor maintains payments as required, at the end of the term of the loan- typically a three-year term – we release the guarantor, and the customer now stands on her new credit record,” says Scotia bank’s Barb Godin.
5. Apply for a secured credit card.
Although they don’t officially exist in Canada, many banks including The Bank of Nova Scotia, offer this option to some of their customers. “ We have a policy that allows a customer to put a certain amount of money on deposit. We issue a card and they can effectively borrow against it.” Says Godin. After a year- or two, depending on where you do business- the bank re-evaluates whether a security deposit is still required. According to Godin, it’s typically a two to one ratio. For a $500 limit, there’s more than $1,000 worth of security. “ We do not advertise it extensively because we’re trying to target our existing customers who are trying to rehabilitate themselves and get back to financial soundness.”
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.
The quick answer is nothing. Whether you live in Canada or anywhere else in the world, your debts remain owing. Your creditors do not care if you left Canada to obtain employment in another country or to look after a sick member of your family back home. Creditors have no heart or compassion – they only want your money. Once you leave Canada, either temporarily or permanent, your creditors have to decide what to do about your debt. First, do they know where you are? Did you leave your current address with the creditor or with anyone else? The biggest factor to the creditor is the size of the debt.
The higher the debt, the more time, effort and money the creditor will invest to try to collect what is owing from you wherever you are. The creditors can sue you in Canada and, if they obtain judgement, they could try to enforce the judgement in the country where you are now living. These are, of course, problems for the creditors. First, they have to satisfy the court that you were properly served with the lawsuit in order to get the judgement against you. Than they have to be able to enforce the judgement in the country that you are now living in. Not all countries have a court system that will enforce a Canadian judgement. It is a time consuming and expensive process as a local lawyer must be hired.
Unless the amount owing is high, most creditors will not choose to chase you in another country. The creditors usually try to convince anyone in your family who is still in Canada that you must pay the debt or terrible “things” will happen to you when you return to Canada. This is not true. The creditors must follow the law just as everyone else is required to do. In most cases, the creditors will simply wait and hope that you return to Canada and that they have the legal right to pursue you to collect the debt. You, as the debtor, also have rights. Within one year after leaving Canada, you have the right to file a proposal or a bankruptcy. It is more complicated as permission for remote assessments and counselling must be obtained from the Office of the Superintendent of Bankruptcy. The reason why debtors do this is that they want to return to Canada with no outstanding debts. Essentially, the debtor returns to make a fresh start for the rest of his life.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form, to learn more please visit our YouTube. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.
Is Debt Restructuring Possible When Income is Limited to an Old Age Pension?
The source of a person’s income does not determine if they are eligible to file a bankruptcy or a proposal, though the amount of their monthly income may affect the options available. A trustee will be able to help you decide which choice makes the most sense for you, based on your individual circumstances.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.
Student Credit Card Debt
Student Credit Card Debt
Is Debt Restructuring Possible When Income is Limited to an Old Age Pension?