How to deal with holiday credit card debt + MORE Jan 4th

DETROIT _ Demand may be slowing, but U.S. consumers still bought a whole lot of cars and trucks in 2016.
U.S. sales of new vehicles _ which set a record of 17.47 million in 2015 _ could hit a new high in 2016. Consulting firm LMC Automotive and car-buying site Edmunds.com each predict sales will squeak past the old record and reach 17.5 million in 2016.
But after six straight years of sales gains _ a string not seen since the 1920s _ U.S. sales have reached a plateau. The National Automobile Dealers Association expects U.S. sales to drop to 17.1 million vehicles in 2017 as interest rates and vehicle prices rise. More buyers are also opting for longer loans, which means they won’t be returning to dealerships anytime soon.
For now, though, the market is strong. Nissan Motor Co.’s sales rose 5 per cent in 2016 to a new more than 1.5 million, a new company record. Ford Motor Co.’s sales were up less than 1 per cent to more than 2.6 million. Fiat Chrysler’s sales were flat at 2…

There was a lot of criticism over B.C.’s announcement to offer interest-free loans for first-time home buyers.

A. Lot. Of. Criticism. And rightly so.

Starting in February 2017, B.C’s government will offer any first-time home buyer an interest-free loan (for the first five years), up to a maximum of $37,500 (or 5% of a home valued at $750,000). The new program is known as the B.C. Home Owner Mortgage and Equity Partnership, or HOME for short.

To qualify for the program, buyers must have lived in B.C. for at least a year (and been a Canadian citizen or permanent resident for at least five years). The household income must be below $150,000 per year, plus each household must prove that they’ve filed their tax return and paid taxes for the last two years. The loan will be amortized over 25 years, with interest set at prime plus 0.5% after five years.

Premier Christy Clark’s rationale for the program was summed up in her comments during the press announcement for this new loan:

“I firmly believe that the dream of home ownership must remain within the reach of the middle class here in British Columbia,” Christy Clark said Thursday in an announcement made at a townhouse sales centre in Surrey…

The flurry of gift-shopping and overspending is finally over, leaving plenty of people with the dreaded holiday hangover.

Just a couple weeks ago, a CIBC poll showed that Canadians were planning to spend nearly $600 for this season’s holiday shopping. While that figure is about 8% less than last year, more than half of respondents expected to go over budget.

So, if you’re finding yourself with a high credit card bill this January, don’t worry. If you’re diligent, there are ways to slowly and surely combat your debt.

First, figure out how much money you can actually spare towards your debt. Don’t use all your spare money to put towards debt, otherwise you might have to borrow again to pay for your daily expenses, which is more than a little counterintuitive.

If the dues have really piled up—not only with your holiday credit card use, but with personal loans, too—you might want to consider consolidating your debts. You could get a consolidation loan, take on a secured or unsecured line of credit or refinance your home…

Q: My wife and I would like to put our inheritance (approximately $80,000) into our TFSAs, which we have never used, to generate as much tax-free monthly income as possible.

Any tips, suggestions?

—Richard

A: Tax-Free Savings Accounts (TFSAs) are a good tool, but they’re just one of many available to most Canadians. When you’re in savings mode, Richard, it’s important to look at all options for each available dollar of savings and prioritize them accordingly.

A TFSA may be a great choice for one person, but a less appealing option for another. TFSAs aren’t necessarily the holy grail of investing, so don’t get preoccupied. Always consider all factors.

Penalty for holding dividend stocks in a TFSA? »

Without full knowledge of your financial situation, Richard, it’s hard to say whether you should just plow your $80,000 inheritance into TFSAs. So I’ve compiled a list of five situations where you should consider NOT contributing to a TFSA to try to help…