Credit vs. Debit: Know the Differences + MORE Dec 1st

By: Barry Choi
We all carry credit and debit cards in our wallets, but when it comes time to pay, which one you reach for for can leave an impact in a few different ways. Which option you choose is ultimately up to you, but it’s important to understand what goes on behind the scenes since debit and credit cards are very different.
The Applicable Fees
Debit cards will always have fewer fees since you’re only spending the money you have available, whereas with credit cards you could be hit with annual fees, interest charges, and other fees and penalties.
It should also be noted that merchants are only charged a low flat-fee rate when customers choose to use Interac Debit. But when credit is chosen as the method of payment, merchants pay 1.5 – 3 per cent of the total price. These fees add up over time, so if you choose debit over credit, you’re helping businesses with their bottom line.
One is More Rewarding Than the Other
The major draw of credit cards is the rewards that they offer…

BMO and Scotiabank's generally upbeat results appeared out of line with Canada’s slow economic activity

Q: We are maxed out on our RRSPs and TFSAs and our remaining funds are in joint GICs (Guaranteed Investment Certificates). Due to our age, we are risk adverse and like to maintain GICs. However, the bank rates for GICs are relatively low and more importantly, the banks are covered under the Canadian Deposit Insurance Corporation (CDIC) for only $100,000.
This means that we have to spread our funds over various institutions – and this is becoming cumbersome.
We recently heard about credit unions covered by the Deposit Guarantee of Manitoba. Their GICs rates are more appealing and their limits are unlimited.
1. How safe or risky are the credit unions covered by the Deposit Guarantee of Manitoba?
2. Are there any other avenues to take?
3. Typically, what do corporations, business and/or private people do with their money if they have large sums of money to invest (more than $100,000)?
–Jack
A: Yours is a good problem to have, Jack. Although having too much money is better than the alternative, it never ceases to amaze me how the wealthy worry about money too – just in a different kind of way…

A credit card can be a powerful financial tool when used responsibly, and can also help build your credit score. But what if you don’t have sufficient credit yet, or have damaged it in the past, and can’t qualify for a credit card?
Fortunately, there are options available for those who can’t get a credit card on their own.
Co-Signed Credit Cards
Similar to a mortgage, some lenders will let an applicant use a co-signer in order to qualify for the card. The co-signer, who typically has good credit, is equally responsible for any debt owed to the card, and their credit score is also on the hook. Co-signed credit cards are slightly different than supplementary cards, which just allow you to access the credit of another cardholder (usually a parent and teen), and can be a good way for those with limited credit (typically students and newcomers to Canada) or damaged credit to get credit cards.
However, co-signed credit cards can be a deterrent for those trying to build their own credit scores; because the loan is based on their co-signer’s credit, they aren’t actually improving their own score through use of the card…