How Credit Card Calculates Interest

December 15th, 2014 Posted in Credit Cards|Debts | No Comments »

How Credit Card Calculates Interest

How Credit Card Calculates Interest

In Canada, credit card company uses mainly two methods to calculate the interest you pay. The methods are, average daily balance method and daily balance method. Although the methods are different, they generate same interest charge. If you are interested finding out which method your card uses, you can call their 800 number or you can find it in your credit card agreement brochure. Now let’s look at these two methods.

Average Daily Balance Method

Your credit card has billing period of 29 to 31 days. Average daily balance is just the average of you daily balance during your billing period. Average daily balance is calculated at the end of every month. Take the balance at the end of every day and add them up (A). Divide this total (A) by the number of days in your billing cycle to get average daily balance (B). B is multiplied by daily interest rate to get average daily interest amount(C). Now, to calculate interest charge for the month, multiply C by the number of days in the billing period.

To get daily interest rate, take annual interest rate and divide by 365. Also, interest rate can be found on your monthly statement.

Daily Balance Method

This method is simpler than average daily balance method. Instead of making one calculation at the month end, daily balance method calculates your interest at the end of every day of the billing period. Calculation method is simple. Take your daily balance and multiply that by the daily interest rate and add up daily interest to obtain interest for the month.

Purchases, Cash Advances and Balance Transfers

If you pay your balance in full, you never pay any interest. If you don’t pay your balance in full, you’re charged interest from the date you made these purchases until they’re paid for in full. Some credit card issuers charge interest from the date the purchases are posted to your account. You’re charged interest from the date you made the cash advance or balance transfer.

Let Your Credit Card Company Pay Your Interest

By paying you balance every month in full, you are actually using your card company’s money for free for your full billing period. Your card company always wants you to carry a balance so they can charge you interest and that’s how card companies make money. If you are paying your balance in full, you a re actually using your card company’s money at their high interest rate for free. Let me give you an example. In Sep 2006, I bought five British Airways return tickets for my trip at approximately $2000 each. My total cost was $2000 * 5 = $10,000. Most of the card companies charge 20% annual interest rate. If I do an approximate calculation for $10,000 at 20%, my one month interest charge would be $165. Yes, that’s right. My one month interest charge would have been $165. But I avoided this charge by paying my balance in full and definitely my card company did not like it because they lost $165. If you look at this little differently, you can say that I borrowed money for one month at 20% interest rate but I have not paid any interest because my credit card company paid it for me.

What do all these translate into? Know how you are being charged and what your interest rate is. Pay your balance in full. It’s like using your card company’s money at their expense.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Dec 21, 2008.

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India Will Overtake China
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India Will Overtake China in Economic Growth

December 13th, 2014 Posted in Canada|Global Economy | No Comments »

Fastest Growing Emerging Market Economy is India

Fastest Growing Emerging Market Economy is India

Goldman Sachs recently predicted that India will become the fastest growing emerging economy in 2016-2018 and will overtake China.

Lower commodity prices and structural reforms are some of the factors that will push the Indian economy over the edge and surpass China for the next few years. Also, the stock market is expected to 13 percent return after currency depreciation.

India’s Gross domestic product or GDP is expected to grow at 6.3 and 6.5 percent in 2015 and 2016. China’s GDP is expected to grow at 7 and 6.7 percent in 2015 and 2016. However, India is expected to accelerate and China is expected to decelerate from that point, as Goldman Sachs mentioned.

China is likely to stay below 7 percent growth in the near future. However, India will speed up its growth and will become the fastest-growing economy in the emerging market, putting other emerging economies such as South Africa, Russia, and Brazil far behind.

The Indian rupee will also likely stay stable in the coming years due to heavy capital flow. No major turmoil is expected, even with US Federal Reserve rates rising shortly.

On a separate note, Japanese investment firm Nomura recently mentioned that the Indian GDP is expected to grow 5.5 and 6.5 percent in current and next fiscal year.

Inflation is expected to decline further and no possible cutting of rates by the Reserve Bank in 2015, but there is a possibility of a lowering rate in the second half of the 2015 by only a 25 basis point.

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Why Go Into Real Estate?

December 10th, 2014 Posted in Global Real Estate | No Comments »

Why Should You Consider Getting Into Real Estate

Why Should You Consider Getting Into Real Estate?

The world of real estate is one that is filled with challenges, and is never as straightforward as one would like it to be – as some think it may be from the outside, indeed. There is certainly no reason to suggest, though, that one should give up on the idea just because of the difficulties, it is these difficulties that make real estate what it is – an arena in which the strong survive and are rewarded handsomely for so doing. What is the story? Why should you consider getting into real estate?

1. The money. Let’s not pull any punches, very few people who get involved in the business of real estate go into it without money as their primary motivation. The most recognized way in which people make money from real estate is to buy a property when it is cheap, and potentially not very nice to live in, then spend some money bringing it into shape so that it can be sold on at a profit. The equation is fairly straightforward. You start with a modest outlay on a modest property. You want to maximize what you can bring in for it while not spending too much. Clever property developers will know how to improve a property while getting the best value.

2. Working for yourself. Sometimes there will be a lot of money in a job where you are answerable to other people. Sure, you enjoy the money, but when you are continually having to devote your time and skills to serving the need and request of someone else it can be tiring and unrewarding (except on the financial front, of course). Being your own boss means that you get to make the decisions and as well as being able to benefit financially you will also have the chance to make your personal philosophy into something concrete. This is something that is enriching in more than just the obvious way.

3. Standing in the community. This is something that tends to go hand in hand with financial success, of course. The two things are different, though. You can become a respected member of the community without a lot of money, and you can certainly make a lot of money without becoming a respected member of the community. But working in the real estate business can offer you the chance to really make ties that will stand you in good stead. Good property options will make a community far more profitable, and by contributing to that you may find that you are sought out by people with sway.

4. The journey is a blast. Often when someone buys a house, they do it up, sell it on and go back to work with a tidy profit in their bank account. This isn’t wrong. But if you realize  a knack for developing properties, you can continue reinvesting and keep making more money. When you are successful in real estate, it often means the big dream coming true – being able to retire early in order to enjoy your spoils at leisure.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the realestateexpedition.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on May 1, 2009.

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Canada’s Best Chequing Accounts
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Canada’s Best Chequing Accounts

December 6th, 2014 Posted in Reviews|Interviews | No Comments »

Are-You-Still-Paying-Banking-Fees_thumb.jpg

 

 

 

 

 

 

Are You Still Paying Banking Fees?

Today, I am going to review chequing accounts offered by Canadian banks. I have researched most of the banks offering chequing accounts in Canada; however, I was able to find only two institutions worth mentioning. I am not going to review any products offered by big players like Royal Bank, TD Bank, CIBC and so on, as they do not offer any free chequing accounts. My objective is to review products and services that make perfect personal finance sense, and if you are looking for chequing accounts with lots of features and no fees whatsoever – you have come to the right place.

My First Pick

President Choice No Fee Bank Account

Where on earth you will get free banking + free cheques? Yes, President Choice Financial offers that. Let’s look at some features they offer:

  • Free online and telephone (automated and live) banking.
  • Unlimited free transactions at CIBC or PCF bank machines.
  • Unlimited cheques come with free chequing account
  • Unlimited free Interac® direct payments
  • Earn points towards free groceries

My second Pick

Citizen’s Bank of Canada Global Chequing Account
  • Withdraw money globally without paying fees (terms and conditions apply. Visit their website for more info)
  • Free online and telephone (automated and live) banking.
  • No fees debit card purchases in Canada and US.
  • Free access to over 2500 ATMs in Canada
  • Overdraft protection up to $1000 if qualified

My Take

The only thing you have to give up to do free banking is the service of a brick and mortar branch. PCF offers Pavilion at Loblaws where you can meet a live person but it’s not like going to a branch. Citizen Bank does not have anything like Pavilion. Do you really need to meet a live person to do your banking? I have been with PCF for ten years and I never needed help from a live person to do any transactions.

if you travel a lot and use your bank card outside the country, you should consider Global Chequing Account. If you do not travel often and don’t need to use your bank card outside Canada, PCF No Fee Bank Account is what you should consider. PCF lets you use CIBC’s ATMs for free – which I find is very convenient.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Dec 15, 2008.

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Limited Time Opportunity: Download Money Hacks For Free on Amazon

November 29th, 2014 Posted in A Dawn Books | No Comments »


Money Hacks: How Small Changes Can Save Big Money

 

Get Money Hacks For Free For 5 Days Only – Really, No Catch

Today, I am writing this post to let all my readers know that I have started a special promotion for 5 days, so all of my readers get an opportunity to obtain Money Hacks: How Small Changes Can Save Big Money for free. Download Money Hacks for free on your Kindle app (Kindle app is a free application you will have to install on your computer, tablet, or smart phone) and also let your friends and family know, so they can get it for free as well. After all, who does like to save money? Applying the techniques mentioned in Money Hacks will save you at least $100 in any country.

There is no catch or obligation. However, if you decide to show me your support, please write a review or comment on Amazon by following the link. Even a one to two sentence comment can help and it takes less than 5 minutes to do so. You are free to rate any stars from one to five as you feel is appropriate.

Media outlets have been notified via press releases and I will keep you posted on any developments. I am including a pre-release link/attachment/content as an FYI. Thank you for getting a Money Hacks copy and I appreciate your support.

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Money Hacks: How Small Changes Can Save Big Money Has Been Published

November 25th, 2014 Posted in A Dawn Books | 2 Comments »

Money Hacks How Small Changes Can Save Big Money

Walk Into Stores With Confidence

Buy Money Hacks: How Small Changes Can Save Big Money

I am writing this post to let you all know that my second book Money Hacks has been published and is available to download on Amazon. Unlike my first paperback book Invest Now, which is available at physical bookstores and at all online bookstores, Money Hacks will be available only as an eBook. Money Hacks is a part of Amazon KDP Select program and available exclusively through Amazon Kindle.

Money Hacks delivers surprisingly simple steps to save money. By following practical steps to save money through various walks of life mentioned in Money Hacks, you should be able to save at least $100 monthly anywhere on earth, as Money Hacks has been designed for global readers.

Money Hacks will be available for free for 5 days (starting coming weekend) and you can download from the link mentioned here. However, to make it affordable for everyone I have priced it at only $2.99. So if you miss the free time frame, you can still buy it without breaking the bank.

As there will be several press releases and posts in the coming days, I will keep you posted on A Dawn Journal. I thank all my readers for their support.

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Money Hacks Sample Covers

November 22nd, 2014 Posted in A Dawn Books | 1 Comment »

Money Hacks Cover Sample

One Money Hacks Cover Will Be Final Among Four Covers

My next eBook Money Hacks: How Small Changes Can Save Big Money is currently going through its cover designing. Cover designers will make four different covers and one of them will be finalized.

Today, I am presenting the first cover that is available as of this moment for my readers. I will try to post the other 3 covers as well to let everyone have a glimpse of how each cover would look like.

On a separate note, the format designer completed formatting the book from Word to Amazon compatible Mobi format. So you can say that the major work is done on the book. The only wait now is to get 3 more covers from a different cover designer and picking the best cover that suits the book.momney hacks - draft

I am looking at late November or early December when Money Hacks will be published. So in about 3 more weeks the wait will be over.

NB – After writing this, another 3 covers became available and I am also attaching it here.

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Money Saving Tips

November 22nd, 2014 Posted in Life|Money Smart Tips | No Comments »

Simple Ways To Save Money

Simple Ways To Save Money

Today, I will discuss how you can save money by taking these simple steps. Let’s look at five areas we spend money on a daily basis. 

Save Money On Cable TV

Cable TV can cost you from $50 to $100 per month – which translates approximately $600 to $1200 annually. These amount are hard cash you are paying with your after-tax money. If you think in terms of before-tax income, you will be saving a lot of money. Living without cable is not impossible. Many people watch broadcast channels, which are free and you can do it too. If you think this is not something you can do, switch from premium cable to basic cable – which will cut your cost in half. Do you really need to have 1000 channels that you hardly watch?

Save Money On Lunch

How much does lunch cost these days? It costs somewhere between $7 to $12 to have a decent lunch. Let’s assume you are spending $10 per day. How much money you are spending annually? $2,400 each year and this is your after-tax money. What it means that if you can eliminate buying lunch all together, you can give yourself a raise of about $4,000 (if you are in a 42% tax bracket) annually. If you can’t cut lunch daily, at least bring lunch from home three or two times a day and still you will be saving a lot of money.

Save Money On Home Phone

We subscribe to lots of features we never use. Cut all these features and live with a basic phone service. You  may be able cut your cost by about 40%. Keep an eye for other phone company offers and rewards. If they are giving the same services you have at lower costs, switch your phone company. Also, you can ask your existing phone company that their competitor is offering it at much lower prices and ask for discounts. Chances are high that you will get it.

Save Money On Cell Phone

Added features on a monthly plan can cost you a bundle. Try to stick to a basic plan that meet your needs. Pay As You Go is an option you should be looking at. Usually it costs a lot less except some extra features. One thing I like about Pay As You Go is that there is no System Access fee. Also, Pay As You Go already includes features like caller id, voice mail etc for free. Nowadays, you can buy unlimited evenings and weekends Pay As You Go services without breaking your bank account.

Save Money On Internet Phone

VOIP (Voice Over Internet Protocol) gives you the opportunity to use your high speed Internet to make phone calls and save money. Home phone plans using VOIP can be as low as $10 per month. Many VOIP companies offer this type of services. To find one, just do an online search entering VOIP, Internet phone keywords. You can even make long distance calls for free these days. Here is an article which explains how to do it –

How To Make Free North American Long Distance Calls

Save Money On Internet Subscription

If you degrade your Internet subscription to a lighter version, you will be able to save 20% to 35% right away. Most likely you will not even notice that you are using a lighter version. This is huge saving as this is a recurring cost you are saving each month, month after month. Another way you can save by switching a no brand name Internet provider. Small Internet providers can offer better rates and savings than brand name ones. You need to do your homework to find one. Just do an online search by entering "Internet service provider" and look for better rates.

Save Money On Magazine Subscriptions

Do you really need to subscribe (or buy) all those magazines which you never have time to read? Most of the magazine publishers put  these magazine contents online for free after a few weeks. You just need to be patient  to save money sometimes.

After reading these tips, start following them to save money. You may not be able to follow each of these but at least try a couple of them and see where it takes you.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Dec 8, 2008.

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Welcome To Real Estate Expedition

November 19th, 2014 Posted in Global Real Estate | No Comments »
Let The Real Estate Expedition Begin
Let The Real Estate Expedition Begin

Entering the world of real estate is something that comes with its own risks, unquestionably. There is no point in sugar-coating the obvious – in the midst of a global recession not everything will be as straightforward as it once was. But that is certainly not to say that there will not be rewards for the person who judiciously and intelligently goes about the business of investing in property. For some it is absolutely the time to invest, with prices lower than they have been for some time. Fortune favours the brave, as the old saying goes. The tricky part is judging what constitutes bravery and what is naivete.

This website is devoted to real estate, and everything that you have come to understand by that term – and more besides. For anyone looking to invest in real estate there are so many possibilities, with the risks and the rewards that come with opportunity. It is a sector that holds an almost mythical aspect in the minds of many people, with everybody knowing that there is money to be made, but that fortunes are sometimes lost in property – not to mention that it can be tricky to get started in the first place. Real estate is not a business that you can get up and running in without serious investment.

The title of this website, you will have noticed, is Real Estate Expedition. The word “expedition” tells you something about what the world of real estate is like. There is something of a voyage of discovery involved in making a foray into the business. Even if you make plans beforehand – and there is no question that it is advisable to plan fully and comprehensively – there will still be a steep learning curve, and that is something that we will hope to help you with. Tips, case studies and opinion pieces will all be a part of that.

The idea of an expedition also pays respect to the fact that you will meet with a wide and varied range of opportunities and questions. Real estate can be as insular as you like – if you are looking to buy a house in a different part of town there will be no less a process to follow. It can also be something that involves a very broad search and a big step into the unknown. It is becoming more and more common for people to buy properties in another country for holidays or even for the purpose of emigrating. We will cover those topics too.

Venturing into the real estate business can be extremely rewarding, as long as you take full account of the very real challenges it will present you with. Challenge is not something of which to be afraid, because it is in taking the challenges on and overcoming them that you really earn your money and your invaluable experience, something that will serve you well if you intend to make a career or even a lucrative sideline in the property business. Let us be your guides on a journey that could be the most interesting you ever make.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the realestateexpedition.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Apr 27, 2009.

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RBC Launches 5 New ETFs

November 16th, 2014 Posted in ETFs|Mutual Funds | No Comments »

New-Dividend-ETFs-From-RBC.jpg

New Dividend ETFs From RBC

RBC Global Asset Management launched 5 new dividend ETFs targeting various sectors in the international markets. These ETFs offer monthly income, along with broad international diversification and reduced foreign currency risk.

Let’s look at these 5 ETFs in brief:

RBC Quant Emerging Markets Dividend Leaders ETF (TSX: RXD, MER: 0.64%) – Holds dividend-paying companies in the emerging markets that have growth potential based on modified cap weighting methodology. The ticker symbol for the US$ version is RXD.u.

RBC Quant European Dividend Leaders ETF (TSX: RPD, MER: 0.49%) – Holds dividend-paying companies in the European markets that have growth potential based on modified cap weighting methodology. RPD is the first European dividend trading on the Canadian stock exchange that is not hedged. The ticker symbol for the US$ version is RPD.u.

The three other ETFs are currency-hedged. These are:

RBC Quant U.S. Dividend Leaders (CAD Hedged) ETF (TSX: RHU)

RBC Quant European Dividend Leaders (CAD Hedged) ETF (TSX: RHP)

RBC Quant EAFE Dividend Leaders (CAD Hedged) ETF (TSX: RHI)

Altogether, there are 8 RBC Quant Dividend Leaders ETFs and 17 total ETFs offered by the RBC Global Asset Management.

How do the fees for these MERs compare? Let’s look at RBC Quant Emerging Markets Dividend Leaders ETF and some other emerging market dividend ETFS. The SPDR® S&P Emerging Markets Dividend ETF charges 0.59% MER, iShares Emerging Markets Dividend ETF charges 0.68%, and HAJ Horizons Active Emerging Markets Dividend ETF charges 0.80 percent. As you can see, RBC’s MER is fairly similar with other ETFs for the same emerging market dividend ETFs.

Always do your research before buying any investment products and seek professional advice if you are not comfortable picking your own.

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