What Should Know About A Personal Line of Credit

When a bank provides a client with a personal line of credit, it does so with the understanding that the funds will be used for various reasons. Some individuals, the money will be used to finance their latest spending spree or be a source of insurance when it is needed. Regardless of how the money will be spent, the bank will always profit from offering the financial product.

Royalty-Free Stock Photography by Rubberball.comAs potential or current user of a personal line of credit, do you know how to best manage it without paying extra fees and interest? Below are 9 basic things that you should know before spending a dollar from the source of financing.

1.    Lending range

Banks have various lending ranges that clients can select from for their needs.   Although clients can apply for a maximum amount of money, banks do have the final say of the amount that will be available.   Using clients’ credit reports and other analysis tools, banks will decide the appropriate lending range to insure that the credit is repaid in a timely fashion.

2.    Interest rates

Interest is charged to clients who select to access money from their line of credit.  Similar to mortgage rates, interest rates can be fixed or variable.   It is best to discuss with a bank representative which option fits your ability to repay the money and not go into further debt.  Usually, interest rates for lines of credit are usually lower than they are for credit cards (even low-rate credit cards), personal loans or other short-term loans.

3.    Fees

When using a personal line of credit, clients must keep in mind the associated fees attached to the source of funds.  To generate more profit, banks may charge an unused line fee, often an annualized percentage fee on the money not withdrawn.  (Ask your bank representative to explain all applicable fees that comes with your line of credit.)

4.    Type of personal line of credit

Personal lines of credit can be classified as either secured or unsecured.   Secured personal lines of credit are backed with your property or investments typically results in a lower interest rate and higher credit limits.   Unsecured lines are not supported by any type of collateral and thus resulting in a higher interest rate.    Banks will allow clients to select which type is best for them given their financial situation.

5.    Repayment options

Unlike a personal loan or a mortgage, clients must repay the money (plus interest) that they have used for the line of credit.   For example, if a bank grants a client a line of credit of $5000 and the client utilizes $2000,   the bank should expect $2000 plus interest to be back in coffers in a pre-determined period of time.  Clients must make at least a minimum payment on their balance every month.

6.    Re-applying

Banks have different policies when it comes to re-applying for a line of credit based on a client’s credit history.  If there are not any issues with client’s credit history, banks will waive the application process and make the lending range available immediately.

7.    Monthly statements

Whether it be by mail or on the web, clients can keep track of the amount of money that is available via the line of credit and how much they owe.

8.    Insurance

In the event that clients die or become disabled, there might be a need for insurance to cover their line of credit.   This maybe the case for clients that have a large unsecured line of credit that have not being paid down in a timely fashion.

9.    Negotiation options

When it comes to obtaining the financial product, everything is negotiable.   Whether it be lending range, interest rate or term, individuals have the power to dictate what they need from a personal line of credit due to the fact there are various financial institutions to obtain the source of credit.    All that this required for a successful negotiation is knowledge of what is available elsewhere and knowing what is required to fit respective needs.

A personal line of credit is an alternative source of money that banks do not offer for free.  It is the client’s responsibility to manage this specific source of funds to ensure that the minimum amount of interest and fees are paid on time.

What is a Mutual Fund?

This is one of our most common questions. This video will briefly explain what a mutual fund is and how it works. We’ll show you how investing in a mutual fund with Credential Asset Management Inc. at Synergy Credit Union can be beneficial for you – in both the short-term and long-term. It’s never too soon or too late to start saving.

Qu’est-ce qu’un CÉLI?

Par définition, il s’agit d’un compte d’épargne libre d’impôt. Mais plus concrètement, qu’est-ce que c’est?

Il s’agit d’un compte dans lequel l’impôt n’interfère pas, ni de près, ni de loin. Et ce tant à la cotisation que pendant sa durée ou à son retrait.

C’est donc dire que ce compte ne donne pas droit à un crédit d’impôt à la cotisation et les intérêts ou gains encourus sur le compte ne sont pas sujet à l’impôt. Au moment du retrait, le plein montant vous sera versé, encore une fois, exempt de toute taxation.

Cela veut donc dire que le CÉLI tient d’avantage du régime fiscal plutôt que du compte. En effet, tout comme un REER, celui-ci peut être investit dans une multitude de véhicules de placements tel que dépôt à terme, fonds communs de placements, titre de valeur mobilière, etc.

Les cotisants peuvent donc investir un montant cumulatif de 10 000$ par année

Talk With Our Kids About Money Day

The “Talk With Our Kids About Money” Day 2015 is fast approaching. The event is taking place Wednesday April 15th.

We encourage members of the media to participate in “Talk With Our Kids About Money twokamDay.” There will be opportunities to do stories, interviews, panel discussions, articles, and more.

The program encourages Canadians to have conversations with youth about money and personal finance. The annual event takes place the third Wednesday in April, this year, April 15, with a “Home Program” for families and a “School Program” for Grade Seven students and teachers. Both parents and teachers can visit the online hub, http://www.talkwithourkidsaboutmoney.com, free for anyone to access, and updated with resources and curriculum ideas.

Some of the Launch Activities that will be taking place in Québec that could attract media coverage on the “Talk With Our Kids About Money Day” on Wednesday April 15th are:

  • At LEARN Québec in Laval – from 9:30 am to 11:00 am
    2030 Dagenais Blvd. West, Laval
    A Videoconference involving teachers and students in virtual classes at several remote sites across the province. Seven sites will participate in this activity. The presenter will be located at the site in Laval. Brian Smith Vice-President Quebec Operation and Financial Literacy expert will be having a conversation on money topics and will be inviting students to participate in a fun and engaging activity. With this activity we are hoping to reach out to as many students and teachers as possible on the TWOKAM Day on Wednesday April 15th. Sonia Zahabi, Branch Manager representing BMO will be joining Brian Smith Vice-President, Quebec for the Canadian Foundation for Economic Education for this activity.
  • At École secondaire La Voie CSDM – 12:30 pm to 1:30 pm
    6755 La Voie Street, Montreal
    An Open House activity to celebrate Talk With Our Kids About Money Day. The student population and teachers will be invited to join in the conversation.
  • At Carrefour jeunesse-emploi Côte-des-Neiges – 5:00 pm to 7:00 pm
    6555 chemin de la Côte-des-Neiges, Montreal
    An Intergenerational Activity will take place involving participants from different generations, seniors, parents and youth. They will be encouraged to share their experiences and stories on money topics.

If you are interested or if we can help in any way, please contact us and we will be pleased to assist you.

Brian Smith
Vice-President – Quebec Operations

Jacynthe Dallaire
Provincial Coordinator in Quebec
Talk With Our Kids About Money


La Journée « Parlons d’argent avec nos enfants »

La Journée « Parlons d’argent avec nos enfants 2015 »  arrive à grands pas, elle aura lieu le mercredi 15 avril prochain.

Nous encourageons les membres des médias à participer à « La journée Parlons argent

avec nos enfants
». Vous aurez l’occasion de réaliser des reportages et des articles, de faire des entrevues, d’assister à des discussions entre experts et plus.

Le programme encourage les Canadiens à engager la conversation sur les questions d’argent et de finances personnelles avec leurs enfants. Cet événement annuel a lieu le troisième mercredi d’avril, soit le 15 avril cette année, et il comprend un « Programme à domicile » pour les familles ainsi qu’un « Programme scolaire » pour les élèves et les enseignants de secondaire 1.

Les parents comme les enseignants peuvent consulter le site en ligne, à l’adresse www.parlonsargentavecnosenfants.com, gratuit pour tous et mis à jour avec des ressources et des idées des situations d’apprentissage reliées au programme de formation de l’école québécoise.

Voici quelques exemples d’activités de lancement qui auront lieu au Québec et qui pourraient intéresser les médias lors de la Journée « Parlons d’argent avec nos enfants » le mercredi 15 avril 2015 :

  • Au bureau de LEARN Québec à Laval – 9h30 à 11 (Anglais)
    2030 Boulevard Dagenais Ouest, Laval
    Une Vidéoconférence regroupant des étudiants et des enseignants dans sept sites situés dans des régions éloignées du Québec. L’animateur de l’activité sera au site de Vidéoconférence de LEARN Québec situé à Laval. Brian Smith, Vice-Président des opérations au Québec pour la FCEE et expert en littératie financière engagera une discussion sur des thèmes reliés à l’argent avec les étudiants participants à l’activité. Nous souhaitons rejoindre le plus d’étudiants et d’enseignants possible par cette activité lors de la Journée « Parlons d’argent avec nos enfants » le mercredi 15 avril prochain. Sonia Zahabi, directrice de succursale chez BMO se joindra à Brian Smith pour cette activité.
  • École secondaire La Voie CSDM – 12h30 à 13h30
    6755 rue La Voie, Montréal
    Une activité Porte Ouverte pour célébrer la Journée « Parlons d’argent avec nos enfants ». Les étudiants et les enseignants seront invités à venir discuter et échanger sur le thème de l’argent.
  • À Carrefour jeunesse-emploi Côte-des-Neiges – 17h à 19h
    6555 chemin de la Côte-des-Neiges, Montréal
    Une activité intergénérationnelle regroupant des personnes du bel âge/ des aînés, des parents et des adolescents. Cette activité vise à favoriser les échanges avec des personnes de différentes générations en abordant des discussions sur des thèmes reliés à l’argent.

Si cette journée vous intéresse ou si nous pouvons vous aider de quelque façon que ce soit, n’hésitez pas à communiquer avec nous.

Brian Smith
Vice-président des opérations au Québec

Jacynthe Dallaire
Coordonnatrice provinciale au Québec
Parlons d’argent avec nos enfants


6 Practical Strategies to Control Your Debt

Whether it is a student loan or having a large balance remaining on your credit card, debtmanagementeveryone hates to be in debt.   Not only do you have to be obligated to pay back the sum of money with interest, you have a finite amount of time to fulfill the responsibility.    Without a method to control the level of debt that you are in, getting out of the financial responsibility will remain an ongoing challenge which will lead to future consequences.

To avoid such a challenge, there are practical strategies that you can use to control your debt and find ways to plan for a healthier financial future.    Below are six strategies which you may apply for your particular situation.

1. Identify The Source and Use of Debt

The first step to better manage debt is to know who are in debt to and the way it is used.   If the debt is incurred for the long term (for example: mortgage or school) then you will have less wiggle room to manage it versus credit card debt.   Credit card debt can be managed in a variety of ways, primarily by stopping the use of the card.   Using the card to finance a new wardrobe will not help improve the level of debt that you are attempting to deal with in the short and long term.

2. Create Your Budget

Using a budget will help you get control of your debt.   The budget will allow you to see where your money is coming from and going to on a monthly basis.  When creating your budget, be sure to list the creditors that you owe money and how much. Upon looking at your budget, you may decide to make changes to allocate more money to pay down more of your debt.  For example, if you notice that you are spending too much on leisure activities, you may want to take a percentage of that amount and dedicated to a mortgage or credit card payment.

3. Pay More Than The Minimum

One of the major obstacles that individuals have regarding debt is making the payment of the appropriate amount of cash.   By just paying the minimum amount each time payment is due prolongs the challenge of getting out of debt.  As a result, you should attempt to pay more than the minimum to avoid higher interest payments.  Here is something to keep in mind if you consider just making minimum payments for credit card charges: If charge $1000 to your VISA card and select to only pay the minimum of $30 at an interest rate of 19.99%, it will lead to be in debt for four years with total debt of $1432.90 assuming that are no other charges made to your card.  (Note: The same principle applies to mortgage in which if you select to pay more than the minimum, the faster complete ownership is transferred to you.

4. Automate Your Payments

If you have a steady flow of income going into your bank account, consider automating your debt payments.   This will help you be discipline when due dates arrive and save your time by not having to go to bank to make payments.

5. Negotiate A Lower Interest Rate

The majority of the difficulties that individuals have with debt are attached to interest rates.   Even though interest rates can remain fixed for a certain period time, they can drain your bank account due to your outstanding balances.   Some lenders can be flexible and open to negotiating lower interest rate under specific circumstances.   It is important that you are making every attempt to pay your debt.  Lenders will not negotiate with individuals that are deeply in debt and show no effort to pay creditors.

6. Become A Smarter Consumer

Since personal debt is linked to consumption, your buying behaviour will have to change to aid in controlling your level of debt.   Elements of buying behaviour that you may have to modify are impulse buying, using credit when you do not have the cash in the bank to pay for the items, seeking out bargains and buying pre-used items instead of brand new items.   By becoming a smarter consumer, you will notice how less depend you are on using debt on a regular basis.

Living with debt is a fact of life that can be very unpleasant for individuals that cannot manage it properly.  To begin getting your debt under control, it is important to identify the right elements of a plan that will help you become less dependent on financing that you will eventually have to  pay back with interest.