Using Your Line of Credit to Pay Down Credit Card Balances? Good or Bad?

Canadians are still chalking up debt, but there is some encouraging news on the credit front. Canadians are starting to pay down their credit cards. This is according to a recent report from Equifax Canada.

The report states that the average Canadian cut back 3.4 percent from their credit card debt this past year (2011).

But here's the downside. Many Canadians are paying down that credit card debt using their line of credit, which is tied directly to the equity they have in their home.

Equifax spokesperson Nadim Abdo had his concerns. Paying off a higher interest rate credit card bill with a lower rate line of credit makes sense, however there can still be bumps in the road.

"We're still at record high levels of debt. If there was to be an interest rate adjustment of 50 basis points... we'd see an increase in delinquencies and bankruptcies," said Abdo.

According to The Equifax report,the average Canadian has $6,000 in consumer debt, a 4.5 per cent rise since the end of 2010. In addition, it was noted that the growth rate is slowing - between 2009 and 2010, the average Canadian's consumer debt grew 7.7 per cent.

The drop in credit card debt is a sign that people are finally starting to think about how they're spending, said Lewis Johnson, a finance professor at Queen's University.

"It seems like there's an outbreak of rationality. The more you can shift balances from a credit card where the rate is 24 per cent interest to a line of credit where it's 3 or 4 per cent, the more able you are to pay," said Johnson.

Consumer spending on "durable goods," including everything from household appliances to automobiles, dropped by.4 per cent in the third quarter of 2011, according to Statistics Canada.

The world economy could also impact Canadian debt levels. The ongoing crisis in Europe and the slowdown in the Chines economy could also have an effect on Canadian debt levels.

If the Canadian job market is effected, the interest rates of your line of credit could be impacted too.

Is it worth it? Outside of finding other low risk sources of paying down your credit card debt, yes. For now at least, using your line of credit, which generally is prime plus 1 or a half, depending on the bank, still makes sense. And with this week's announcement of a 2.99 3 or 4 year mortgage rate, it appears interest rates are going to be somewhat low for the foreseeable future.

For more valuable information, visit http://www.prudentcreditrepair.ca

Prudent Financial Services is the leader in loans to people with bad credit histories since 1984.

http://www.prudentcreditrepair.ca/

(416) 634-2018

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Tips For Using Investment Calculators

If you're thinking about investing some money or already have some money invested, there are calculators present online that you can use to determine the state of your savings. As a result of this, you no longer have to wait on the numbers from experts to understand what's going on with your savings. Instead, you can go online, enter your numbers and receive the answer you need in a matter of seconds.

These online investment calculators can be used to calculate a lot of things. For one you can use them to determine the amount of money that you will have at the time that you decide to retire, or even to help you decide when to retire. You can also use these calculators to determine which investment vehicle is best for you and what's even better is that these calculators are fairly easy to use and can also be used free of charge. Here are a few tips on how to use these calculators to get the answers you need.

Visit the Website: The first thing you'll need to do is to locate a website with a reputable investment calculator. Here you'll have the option of choosing between four different types of calculators with all being related to investments or saving. The four types of calculators that you will find are the compound interest calculator, the lump sum future calculator, the CD interest and APY calculator and the financial goal calculator.

Compound Interest Calculator: This type of interest calculator is more suited for situations in which you plan to make deposits to your savings over a period of time and watch it grow. Hence it can be used to determine the future value of your deposits that you make at various intervals. To use this calculator you will therefore need to enter the amount you plan on depositing every interval and the intervals you plan to use.

You will also need to enter the expected annual interest rate and the number of years you plan to use this investment method. If you started this investment with an initial amount you will also be given the option to enter this amount. Once all these values are entered, the calculator will be able to give you the future value of your savings.

Lump Sum Calculator: This calculator is suited for those persons who plan to make a onetime investment and want to know the value of it after allowing it to grow for a number of years. To determine its future value you will be required to enter the amount you are investing, the annual interest rate and the number of years that the amount will be invested for.

The CD calculator: Many persons tend to invest in CDs as the risk associated with this method is very low and at the same time it produces fairly high returns. You can therefore use this calculator to determine the value of your money using the method of investment. You can do this by entering the amount being invested, the interest rate, the time period for which it is being invested and the compounding intervals.

Based on the tips given above one should be able to see that these calculators are fairly easy to use and will give you the results you need to help you make the decision you need to make about your investments.

For reliable investment calculator that will give you the results in need in a matter of seconds visit financialcalculator.org

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