Life on Credit

The art of borrowing money

Doing a Reno? What Are the Best Ways to Finance It?

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There are different ways to finance a reno, whether you want to upgrade your kitchen or dining room or have another home improvement project in mind. You can use cash or apply for a secured or unsecured loan, home equity line of credit, or another financial solution depending on your project requirements, amount of cash, scope, etc. Large products require more cash and fortunately, banks have plenty on offer. Solutions to look into include reverse mortgages, home equity loans, and more.

Use Cash

If you need a small amount of money and have an emergency fund, then you can use cash for your project. If you are short of money, then you may want to go through your assets and belongings and sell items that you no longer need.

Use Low or Zero Interest Card for a Small Reno Project

If you want to reinvent a room or remodel the kitchen, one idea is to use a low or zero interest card with a large limit. The same goes for things like repainting the interior, replacing the plumbing, routine maintenance, and other basic, less expensive updates. If this is the case, a low interest card can be a good choice to benefit from the low promotional rate. Keep in mind that the promotional period is usually over in 6 – 12 months, and a standard rate applies afterwards. The main benefit is the low cost. However, there are no tax benefits and the payback period is much shorter than conventional credit.

Apply for a Personal or Unsecured Loan for a Medium-Sized Project

Examples of medium-sized projects include roof repairs, adding energy-efficient insulation, deck or bathroom addition, etc. You may want to apply for a personal or unsecured loan to finance your home improvement project if you need between $15,000 and $50,000. Credit unions, banks, peer to peer lenders, and other providers offer unsecured financing. The main advantage for borrowers is that this is a low-risk solution compared to secured loans, which require collateral. Unsecured loans usually go with higher rates because of the added risk for financial institutions. At the same time, you benefit from quicker approval compared to secured options. The reason is that with secured financing banks require a validation of the security or collateral, which takes time.

When it comes to interest rates, customers with spotless credit and steady, high income are offered better terms and rates of about 7 – 9 percent. Those with tarnished credit may actually see their application rejected.

The main benefits include a longer repayment period, lower rates compared to credit cards, and no processing fees and closing costs. On the downside, there are no tax benefits that you normally get with a home loan.

Apply for a Secured Loan for a Large Home Renovation Project

A secured loan is a good choice if you need $50,000 or more. If you have a major home renovation project in mind, then you may want to apply for a secured loan. This is especially true for properties that are not habitable, homes in need of conversion, and derelict properties. In this case, you will need money for things like design and survey fees, purchase costs (materials), and the renovation work itself. A large home renovation project can cost a lot of money. Many banks offer large loans but require collateral to ensure repayment. Depending on the amount requested, your credit score, and other factors, the collateral can be in the form of real estate, vehicle, home, vacation home, etc. While you risk losing the asset in case of default, you benefit from more affordable payments and a lower interest rate of 3 – 4 percent.

Cash-Out Refinance

This is a type of mortgage refinancing and another way to pay for your renovation project. Borrowers refinance to obtain more money, and equity is extracted as a result of this. People usually resort to cash-out refinance to buy assets of value or pay down personal loans, cards, and other types of consumer debt. How does it work? Suppose you owe $60,000 on a property worth $320,000. If you need $40,000, then you are free to refinance for $100,000. You will get $40,000 in cash while $60,000 is the outstanding balance. To prove that you qualify, you will be asked to provide information about your debts, assets, income, and so on.

While this is one way to free up cash, there are downsides to consider such as higher than average interest rates.

Home Equity Line of Credit

This is a type of adjustable mortgage whereby the interest rate moves up and down with rate fluctuations. If the rate suddenly skyrockets, you will end up paying a lot of money. The main benefit is the fact that there are no closing costs, and you are free to draw on the line as many times as you need to. Still, there is risk involved if you opt for a HELOC.

Reverse Mortgage

A reverse mortgage is an alternative to consider if you are 62 years old or older. In this case, borrowers are free to draw cash to finance projects, make purchases, go on vacation, or anything else. There are no monthly payments to worry about, but owners are still required to pay homeowner’s insurance and property taxes.

The Small Business Tax Reform in Canada

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The proposed reform aims to introduce changes and eliminate tax loopholes that allow self-employed people to pass income to spouses and other family members. This is a hot topic in Canada as a recent Ipsos poll shows that 55 percent of respondents support the reform while 44 percent oppose the changes, especially small businesses. Making changes to the tax law to deal with vague and obscure language sounds like a good idea, but is it so in reality?

Justifications to Implement New Measures

The reform targets self-employed Canadians and the loopholes they use to reduce their tax burden. The focus is on investment portfolios and capital gains. Proponents claim that the new tax reform can help reduce income sprinkling. Income sprinkling enables self-employed persons to divert income to children and other family members by way of paying dividends, wages, and salaries. According to a report by the Department of Finance, this is a common practice, and about 50,000 small businesses in Canada use sprinkling to pay less in taxes. This is also a way to benefit from passive investments, a practice that the proposed measures aim to limit. This can be done by means of a reasonable test to find out whether children, spouses, and other family members participate and actually contribute to the family business. The pay, whether in the form of wage or salary, is reasonable only if it is comparable to the pay another person would get for the work done. When it comes to capital gains, profits generated through the sale of real estate, stocks, and securities fall in this category. In the view of liberals, diverting income in the form of capital gains gives unfair tax advantage to CCPCs. At present, businesses are free to sell shares to another company and thus avoid taxation. Passive investment is also an issue for Liberals. Income generated through an investment portfolio falls in this category. It is different from active income generated through business operations. The problem with passive investments is that businesses benefit from a significantly lower corporate tax compared to active income.


In addition to small business owners, certain professions take advantage of this to reduce their tax burden. These include physicians, lawyers, farmers, and others. The planned reform is targeted at farming families that distribute profits and work responsibilities to pay less in taxes. Physicians also oppose the new measures, and this can be explained by the fact that most of them are incorporated. A report by the Canadian Medical Association proves this. Again, this is a way to pay less. Some physicians support the tax reform but believe that the best way to implement it is through a transition plan.

Proponents note that the goal of the new measures is to establish a fair tax system for everyone. This can be done by closing gaps that offer tax advantages to those incorporated as a Canadian controlled private corporation. At present, the tax system encourages well-paid Canadians in the high-income bracket to use CCPC to reduce their tax rate and increase their net income. The new measures are also expected to increase government revenue to help vulnerable members and communities and citizens marginalized at the fringes of society. And while Prime Minster Justin Trudeau and Finance Minister Bill Morneau noted that this is not the main goal, a tax reform is one way to increase government revenue.

What Opponents Say

Opponents, on the other hand, point to the fact that the proposed changes place an undue burden on small businesses, especially those planning to expand or invest in new products, services, or operations. And many businesses would be affected as figures by Statistics Canada show. Out of 1.17 million employers operating in the country, small businesses account for 98 percent of employers or 1.14 million. More than 50 percent operate in Quebec and Ontario. Opponents also point to the fact that the new tax reform targets small businesses such as corner stores, garages, bakeries, and florist shops, and not just lawyers, doctors, and other professionals in the high-income bracket. Small businesses such as coffee shops, landscapers, family restaurants, roofing businesses, electricians, and plumbers would be affected. And while the proposed reform is not expected to destroy small businesses, the new measures might discourage many from starting a business. At the same time, small businesses are the backbone and driving force of the Canadian economy.


Opponents also warn that cutting tax benefits means less revenue for small businesses. This often goes hand in hand with fewer benefits, basic or reduced health insurance, longer working hours for employees, and layoffs. The government counters this argument by pointing out that businesses with an annual income of $150,000 CAD would be impacted the most. The same goes for self-employed individuals with extra income after making the maximum contribution to their tax-free savings account or registered retirement savings plan.

Salaried Employees vs. Small Business Owners

Proponents believe that the way things are, small businesses get unfair tax advantage over persons working regular salaried jobs. Opponents to the reform, on the other hand, argue that running a business is a costly endeavor. A lack of paid leave is also an argument in favor of more lenient taxation for small businesses. They suffer further disadvantages such as no guaranteed salary, no guaranteed vacation and pension income, etc. To sum it up, the main downsides of running a small business are fewer free benefits, less security, and lack of regular income stream. Proponents to the tax reform counter this argument by explaining that entitlement to state benefits is not a justification to offer tax advantages. Self-employment also offers advantages in the form of financial rewards, especially when it comes to independent contractors. Many large businesses choose to work with independent contractors instead of hiring employees, which is, by itself, a long-term commitment. Basically, it is less expensive to hire a contractor than an employee. To this, contractors are required to supply their own equipment, tools of trade, mobile devices, computers, laptops, software, etc. Independent contractors are also allowed to deduct business-related expenses for taxation purposes. This is yet another way to increase financial rewards.

Finally, whether the new measures are fair or not is a difficult question to answer. Tax experts draw attention to the fact that there are too many exemptions and exceptions in the current tax code. Even if the new measures come into effect, there is plenty of room for improvement.

Budget March Break Ideas for a Romantic Beach Getaway or Winter Vacation

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There are myriads of unique and exciting travel destinations for an unforgettable March break vacation away from home. Even if you are a budget traveler, inexpensive holiday and travel spots abound. Just pick a destination and pack your suitcase!

Caribbean All-Inclusive Vacations

If you are looking for a budget-friendly destination and a beach holiday at the same time, how about a sunny vacation on a Caribbean island? There are plenty of great resorts for a March break vacation to enjoy delicious food, warm weather, and superb service. Caribbean resorts are luxurious and inexpensive and offer a variety of activities for your leisure time, including golf, scuba diving, land sports, and watersports. Adventure tours are also offered. From off-road excursions and mountain biking to canopy tours and catamaran sails, you are sure to have a memorable vacation. Entertainment venues also abound, offering unlimited spirits, theme nights, limbo dancers and fire eaters, acrobats, and a lot more. The islands in the Caribbean are also the perfect choice for a romantic getaway and candlelight dinners now that weather is nice, with daily highs of 30°C. Whether you choose to travel to Grenada, Antigua, Barbados, the Cayman Islands, Cuba, or Jamaica, you will love it. All-inclusive resorts offer concierge and butler service, free wifi and land sports, and plenty of entertainment for free – beach parties, costume and theme parties, bonfire parties, live shows, and a lot more.

Mexico

Mexico is also a good deal for your spring vacation as weather warms up in March, with average daily averages of about 25°C. You will find great deals away from the traditional tourist zones. All-inclusive resorts offer plenty of entertainment for your entire family, from theatre shows and water parks to teen’s and kids’ clubs, mini-Olympics, and handicrafts. Tourists also enjoy dance instruction, mariachi music, golden beaches, and superb food. In some resorts, kids stay for free. The best part is that you can choose from a great variety of package deals, from deep dive packages and luxury vacation packages to flight and hotel and hotel only packages, and more. There is plenty of choice when it comes to holiday destinations – Riviera Maya, Riviera Nayarit, Mazatlan, Los Cabos, Cozumel, Cancun, and many others. You will enjoy gorgeous, palm tree-lined, sunny beaches, underwater activities, nightlife, fishing activities, and a lot more.

Florida

Florida is nice and sunny at that time of the year. And there are all-inclusive resorts, too, offering world-class accommodation, superb food, spa, and family-friendly games and activities. Many resorts offer activities such as paddle boarding, kayaking, and fishing. Some resorts even feature shopping villages. Recreation activities abound, from parasailing, jet skiing, and boating and scuba diving to live entertainment and cruises.

Indonesia

Indonesia is also a great choice for Canadians, especially for budget travelers. There are plenty of ways to stretch your dollar here. If you don’t mind staying in a guest house in Jakarta, for example, you can find accommodation for as little as $8 per night. A double room on Lake Toba or the island of Sumatra costs as little as $3 per night. Food is also inexpensive. A good single plate meal costs between $0.50 and $1.70 if you don’t mind eating streel-style food. You will pay around $2,50 – $5,50 a meal at a restaurant. Entry tickets for museums and other attractions are also inexpensive. A visit to the Indonesia National Museum will cost you just $0.23. When it comes to all-inclusive resorts, there is plenty of choice, whether travelling solo or with kids. Resorts offer cultural and artistic activities, sports, beach and ocean views, windsurfing, sailing and golf schools, and a lot more. Sports such as cardio, tennis, squash, snorkeling, kayaking, and water polo are often included in the price. Some resorts offer golf at extra cost. Gourmet dining is always a plus.

The Philippines

Also a great destination for budget travelers, this is a good choice for your spring vacation, especially if you plan to fly from the West Coast. Plus weather is nice in March (the high season ends in April) as opposed to June – September when typhoons and storms hit. Accommodation is more expensive but you will find plenty of good deals for your holiday. There are all-inclusive resorts that offer spas, private beaches, beauty salons, shopping arcades, swimming lessons and fitness training, billiards tournaments, snorkeling safaris, and a lot more. When it comes to budgeting, the cost of living depends on location and season. At the same time it is 50 percent cheaper to live in Manila than in cities such as Tokyo, London, and Sydney. To give you a basic idea, a combo meal (burger, Big Mac, etc.) will cost you around $3 at a fast food joint. Domestic beer (0.5l) costs around $0.90 in the store. If you prefer Coca-Cola, you will pay around $1.30 for a 2l-bottle. Prices are affordable. Taxi trips are also inexpensive, i.e. around $11 per 5 miles.

Ski Vacation

Whistler

Whistler is a popular spot and ski resort to spend your March break vacation away from home. Ski packages are available, including snow school, equipment rentals, lift tickets, accommodation, and more. Some hotels also offer event lodging deals as well as golf vacation packages and last minute deals. Whistler also features Olympic tracks, snow peaks, diverse wildlife, and glaciers.

Slovenia

If you are up for a vacation away from Canada, why not visit Slovenia? The country takes pride in having nice skiing resorts which are quite affordable. In fact, there are many low-cost hotels and other accommodation options to go skiing or snowboarding. Check ski resorts such as Kranjska Gora, Vogel, and Mariborsko Pohorje, for example. There are pistes for beginners, intermediate, and expert skiers.  Mariborsko Pohorje is one of the largest skiing centers in the country, situated close to downtown Maribor. Visitors enjoy the mountainous landscape and first-class ski slopes and pistes. There are wellness and spa centers, restaurants and cafes, and excursions and guided tours on offer. You can join a wine tour or culinary tour, for example. Hiking and cycling tours are also available to visit the Botanical Garden and Pohorje forests. Another option is to visit the Organic Urban Center which is situated in Maribor and illustrates the importance of healthy food choices.

Mont Tremblant

If traveling to Slovenia looks like too much, how about a ski vacation at Mont Tremblant? There are plenty of good deals and packages for your March break, including Scandinavian spa packages and snow and ski packages. If coming over with children, what they get is lunch boxes, snowboard and ski lessons, and equipment such as helmets, boots, poles, skis, etc.

When it comes to accommodation, prices depend on time of the year but there are package deals to look into. In any case, you can find a decent hotel for about $70 (breakfast included). It is also a good idea to book in advance. Some resorts offer lift tickets as well (included in the package). Many hotels also have game rooms fitted with consoles, foosball, air hockey, table hockey, and a lot more.

Money and Motivation: Is Your Consumer Behaviour Driving You into Debt?

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There are a number of strategies you can make use of to find out what your “financial” personality is like, so that you can get out of debt and start learning some responsibility. Statistics show that household debt is skyrocketing, reaching new and new heights year after year. Consumer debt comprises around 30% of the total debt.

Market Principles vs. Individual Principles

We live in an age when supply is almost endless. We can buy practically anything we can imagine, and in wondrous variety at that. When you think of the traditional supply and demand graph, you would expect demand to plummet. Perhaps this can be seen as a challenge to the age-old economic principle. Not only is demand not plummeting, it is rising and rising and the state of debt testifies to this. It seems we want things so much that we no longer care that we can’t afford them. However, we should be careful when we assume that macroeconomic principles transfer to microeconomic ones. In other words, market principles do not always reflect individual ones.

Personality Balance Sheet

Experts advise debt-ridden consumers to create what they call a personality balance sheet. The idea is to make a list of your personality traits as they relate to your behaviour as a consumer and define them as advantageous or disadvantageous. What motivates most of your purchases? Granted, this is a difficult question to answer. There are many factors that motivate purchases apart from personality traits, such as age, sex, even location. Naturally people in sparsely populated areas will have a whole different set of criteria when it comes to purchasing goods or services compared to people from big cities.

How Commercials Influence Behavior

Before you can understand how your personality may be driving you into debt, you have to understand the psychology of advertising. What are producers actually going for when they advertise their products? You may have wondered how they possibly get returns on commercials, what with there being so many. Advertising’s main function is informative, true, but it also serves to educate. By advertising expensive luxury products, they work on your system of values, artificially creating demand for something costly and prestigious that you don’t need. If you are especially vulnerable to that sort of “propaganda”, as would be someone with low self-esteem who wants to be respected and admired, you’ll fall for this. You may take out a loan to get the latest BMW or Mercedes model instead of sticking with your trusted Volvo or Pontiac.

If you tend to be on the impulsive side, make sure you stay far from temptation. Take all your credit cards out of your wallet, do not go into stores if you don’t actually NEED anything, and even curb window-shopping. This is not going too far. Do you want to get out of debt or don’t you?

Main Money Personality Types

According to experts, there are several money personality types – the spender, hoarder, avoider, and amasser.

  • Spenders tend to buy on impulse and buy things they don’t need, whether jewelry, groceries, or anything else. They find it difficult to prioritize and save for a rainy day. Spenders are often knee-deep in debt.
  • Hoarders, on the other hand, usually have a budget and prioritize their purchases and long-term and short-term financial goals. For hoarders spending on travel, dining out, magazine subscriptions, and entertainment is a waste of money (and time). Hoarders usually have an emergency fund and prefer to save for college education, retirement, or just in case.
  • The avoider tends to put off things like paying bills on time or doing taxes. He has a hard time saving, planning, budgeting, and dealing with financial matters. This money personality type has a nonchalant attitude towards financial planning and things like retirement income, investment, or insurance. If you are an avoider, it is a good idea to talk to a professional to get in control of your financial life. Always shop with a list, create a budget, and stick to it.
  • The amasser is a different story – for him money means power and enhanced self-esteem. Lack of money, on the other hand, may result in depression and poor self-esteem and feelings of worthlessness and failure. The money monk is the exact opposite, feeling that money and consumption are the root of all evil. A steady paycheck or inheritance money will actually make him feel insecure.

There are three more personality types – the flyer, security seeker, and risk taker. The risk taker, for example, tends to make risky investments such as real estate investment trusts, options, currency trading, and high yield bonds. Risk takers aren’t too worried about financial matters and details. They actually get excited about potential returns, risk, and possibility. Security seekers, on the other hand, prefer low-risk investments such as bonds, savings accounts, and certificates of deposit. They like to be prepared for anything, be it a natural disaster, depression, or apocalypse and humankind vanishing from the Earth. Security seekers usually have an emergency fund for a rainy day. For them, life is about careful planning, budgeting, and saving for the future. The flyer also has a distinct way of thinking. He feels content and happy with life as it is. The flyer has a nonchalant attitude toward financial matters and as long as he is independent, free, and making his own choices, that’s all that matters.

A Final Word to the Wise

At its core, consumption is a social habit. We buy what others buy or encourage us to buy, even though we may not realize it. It follows that you should surround yourself with positive people who realize that there is more to life than shopping.

How Not to Overspend and Set a Realistic Christmas Budget

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It is so easy to overspend during this time of the year now that everyone is excited about Christmas and spending quality time with family and loved ones. This said, you may want to create a realistic budget to meet your daily expenses, pay bills, buy presents, and have fun with your family and friends.

How to Make a Holiday Budget

The first thing to do is to set financial limits and make a list of your spending goals and categories. List your regular monthly expenses such as groceries, rent or mortgage, utilities, outstanding balances, and so on. Then list your income, including wages, salaries, and additional income you may have. This will help you to find out whether you have surplus income to spend on presents or you have to rely on cash in your savings account. If you don’t have enough cash for a rainy day and no surplus income left, there are low-cost borrowing solutions to look into. Back to spending categories, you can make a list of Christmas expenses such as post-Christmas sales, holiday clothing, travel, Christmas tree and décor, entertainment, and holiday meals.

Holiday Gifts

You may include expenses such as kitchen and baking gifts, service gifts and tips, and holiday photos. Other items you can list include Christmas cards, shipping and postage, gift wraps, stocking stuffers, and of course, gifts. Shop around and calculate how much you need in total. If you want to have a more detailed list and plan, think of everyone you will meet and give a gift – grandparents, siblings, cousins, spouse, kids, uncles and aunts, etc. Other people on your list may include coworkers, bosses, partners, church staff, neighbors, and service providers. List all names on a list and divide them into categories, for example, “no gift”, “gift made”, and “gift to make”. This will give you a good idea about the number of people you can afford to give a present. Focus on the “gift to make” category and assign the amounts you plan to spend. Then assign amounts for the “gift made” category (the amounts you have already spent). Calculate how much you have in total. If the total amount is less than your budget for holiday gifts, then you can move names from the “no gift” category to “gift to make”. This is a great way to ensure that you are able to give presents to more people. If you want to, you can also make a gift list and list each gift in addition to gift amount. Alternatively, you can use the envelope system for holiday-related spending.

Think of the types of gifts that are suitable for colleagues, neighbors, and friends. May be Christmas treats, cookies, or anything else? This depends on your budget. Once you do this, have a list of all expenses, and a good idea of how much you need, you may want to start tracking your ongoing expenditures. After you paid for gifts or anything else, make sure you record all expenses to keep track of your spending. This will give you a good idea of the cost of the holiday season.IMG_0100

Other Considerations

To make things run smooth, it pays to prioritize expenses, especially during the holiday season when you have additional expenses. Priority expenses include things like your rent or mortgage, outstanding balances, and utilities. It is important to pay these first, along with council tax, payroll and income tax, spousal and child support, etc. Other expenses to meet include student and personal loans, medical bills, and credit card debt. It all depends on your financial situation, whether you have debt and how much you owe, and other considerations. Finally, there is one golden rule to follow, whether during the holiday season or any other time – live within your means and don’t overspend.

On a Tight Budget

If you are on a tight budget, there are great ideas for free gifts – you have one valuable resource to use, and this is your creativity. If you have enough time, you can think of gifts such as personalized CDs, repurposed old frames, homemade cookies, etc. You can create a scrapbook, album, or photo collage or you can knit or crotchet a sweater, table cloth or anything else. There are plenty of gift ideas such as homemade bread, good reads and books on your shelf, an encouragement jar, and so on. Whatever comes to your mind, really, is best because you know your loved ones well. And if you are short of time and have a tight budget, look for Christmas sales and discounts, promos, and online sales. Online retailers save on rent, salaries, and other expenses and offer exclusive discounts and hot deals.

Low-Cost Alternatives Amidst Fee Hike-Ups by Major Banks

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Canadian Banks Hiking Fees for Account Holders

Major Canadian banks plan to increase their fees or have already hiked up their ATM, debit, and purchase fees and charges on other transactions to make up for profit losses due to falling interest rates. Because of profit squeezes, banks increase their rates on services such as check certifications, credit card payments, and fees on savings accounts. Charges add up while the cost of living constantly rises, from higher bank fees and insurance premiums to rising property taxes and commodity and food prices. Given the fact that Canadian household debt has already hit new high, fee hikes are a source of concern for many, especially borrowers with excessive debt load.

Fees and Accounts Affected

Banks review their services and products annually, including fees, terms, surcharges, and earn rates. The explanation they offer is that they are forced to adjust the pricing to stay in business and keep ahead of the competition. Banks also point to the fact that account fees are adjusted to reflect market conditions. At the same time, this is a sensitive topic for many Canadians, and some are already looking for alternatives to save on fees and charges. The good news is that while banks hike up their fees, pricing adjustments are negligible for some services. For example, the current fee for items deposited at RBC is $0.20 per item while the new fee is $0.22. This is not the case with other services and accounts. The current dishonored payment fee is $40 and the new fee – $45. RBC plans to tweak rates across an array of services and accounts as of June 1, including mortgage payments, debit purchases, and other transactions.

Toronto-Dominion already introduced new fees on business transactions, higher savings accounts’ transfer fees, and higher minimum balances. The new fees apply as of April 1. The Bank of Montreal also plans to adjust the pricing as of May 1 to increase debit transaction fees, bank plan fees, and charges on paper statements. The Bank of Nova Scotia also hiked up fees and charges across transactions and accounts. A report compiled for the Canadian Financial Consumer Agency concludes that fee increases on some accounts are moderate while others are more significant. Last year alone, variable fees and associated payments have increased substantially, with reported increases of up to 46 percent. The fees on checking accounts, on the other hand, increased by close to 14 percent.LOC38

Alternatives to Bank Accounts and Services

While major banks are in the process of updating and adjusting their charges and fees, there are other alternatives to consider, among which finance companies, credit unions, bank subsidiaries, and others. Credit unions, for example, offer affordable fees and rates to union members. Some unions assess no fees on ATM withdrawals and debit card purchases. Fees and charges vary from one establishment to another, however.

Meridian

While Meridian assesses monthly fees, their checking account goes with multiple features and perks and allows users to make ATM withdrawals and deposits, in-store purchases, and bill payments. There is an option to deposit paychecks as well. Meridian’s exchange network allows consumers to make transactions, and they benefit from optional overdraft protection. Telephone, in-branch, mobile, and online banking is also offered to access cash. Automatic transfers to and from accounts are free. Self-service transactions cost $9 a month while official and AMEX travelers checks cost $12 a month. Meridian offers a rebate for up to 4 interac fees for those who maintain a balance of at least $1,000.

Vancity

Vancity features basic accounts with no maintenance fees. If you are a union member, you also benefit from lower credit card rates and fees. The average interest rate on credit cards is around 15.20 percent while banks charge 18.8 percent on average. The average rate on balance transfers is about 14.5 percent for credit unions and 20.1 percent for banks. The e-package checking account is a flexible and convenient option for unlimited debit card transactions. Everyday transactions are free of charge, including debit purchases, transfers, and ATM withdrawals. In-person transactions include account transfers, bill payments, and account withdrawals. They cost $0.70 each, and there is no monthly fee provided that customers maintain a balance of at least $1,000. The monthly fee is $7 for balances lower than $1,000. Check and preauthorized payments are offered at no added cost.

Desjardins

Desjardins features free line-of-credit repayments, summary of transactions, passbook updates, deposits, and more. There are fees for other transactions through regular savings, build-up savings, and checking accounts. Payments of bills, transfers, and deposits cost $1 each. Checks, direct withdrawals, and direct payments in the U.S. and Canada cost $1. Fees apply for teller services as well – $2.25 per bill payment and $1.25 per transfer, withdrawal, or cashing.

More Options to Avoid High Rates and Fees

LOC37Tangerine

Tangerine is a good example. The bank offers a no fee checking account and free withdrawals through Scotiabank’s ATM network. In addition, customers benefit from free online statements, ATM deposits, email money transfers, and online daily banking. Debit purchases and bill payments are also offered at no added cost. The same goes for the first checkbook and Interac e-transfers. One free card replacement and stop payment are allowed. Additional checkbooks cost $12.50, and Interac e-transfers – $1. A late fee of $2.50 applies after thirty days. The current earn rate is 0.25 percent for balances up to $49,999.99 and 1 percent for balances of $100,000 and higher. Customers are paid interest on a monthly basis. Added benefits include mobile-banking for tablets and smartphones, bank drafts, 30-day protection, email alerts for deposits and payments, and more.

PC Financial

PC Financial also advertises a no fee account and offers the option to earn bonus points. They can be used toward free groceries and other purchases. The main benefit for customers of PC Financial is that they are offered no fee daily banking as well as unlimited free checks, free transactions, and no monthly fees. Transactions are free at CIBC bank machines and PC Financial, and account holders save up to $200 annually. Customers are also offered a high interest savings account with no monthly fees, no minimum balance requirements, and an attractive earn rate. Some fees apply to certain banking services. Customized account confirmation letters, for example, cost $16.50 each. Other fees include:

• $20 per inter-branch payments
• $10 per wire transfers from other banks
• $7.50 per bank draft and money order
• $50.00 per GIC, TFSA, and RRSP transfers to other establishments

Downsides and Issues to Keep in Mind

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While some banks and other financial establishments offer safe and convenient solutions with low or no monthly fees, geographic availability is one of the major problems. Some banks have a few branches across Canada while others operate locally. This means that most transactions, including transfers, bill payments, and others, are online transactions. Product availability is another issue. Major banks such as RBC and TD offer a wider range of products and services compared to credit unions and small banks and have many branches across Canada.