My credit card bill arrived the   other day and being just after Christmas, I opened the bill with one eye   closed fearing the worst.  The first thing I did was to check the   “minimum payment this bill” section – and thankfully didn’t pass   out!  Then I noticed something that I hadn’t before – there was a note   under my long list of purchases telling me how long it would take to pay off   this bill if I continued to make only the minimum payments.  My credit   card company had thoughtfully calculated that it would take approximately 4   and a half years to pay off this one bill!!  Suddenly this didn’t seem   like such a great option when you take into consideration interest rate   charges and future purchases….  It got me thinking then, how do you   save with the way that you pay?

Every day we are faced with the question of how are we going to pay for this   purchase?  Have you really thought about it or has it simply become an   “automatic” reaction?  As consumers, we have various payment   options available to us and there are easy ways for us to save money and help   to pay down debt.
It pays to use cash – one bonus   is that using cash can help you stick to your budget.  It is important   to remember, however, that you should make efforts to only withdraw cash from   your financial institution’s ATM; otherwise you could be facing additional   transaction costs for using a different ATM.  Another thing to remember   is, as tempting as it may be; avoid taking a cash advance on your credit card   since interest will be charged on those funds immediately.

Think before you “debit” – we Canadians certainly love our debit cards, but as   convenient as they are, it is important to ensure that they are used   responsibly.  Check with your bank about the number of transactions you   are allowed free each month and what the charge is above that   number.   These extra fees can have a way of adding up.

Should you really “buy now and pay later”?    – sureat the time it sounds like a   great idea, but are you actually paying more for your purchases in the end?     “Carrying a balance on a credit card increases the cost of   everything you purchase with the card due to the amount of interest you pay,”   says Ursula Menke, commissioner of the Financial Consumer Agency of Canada   (FCAC).  Make it a goal to pay off your balance in full every month to   avoid paying interest charges.   To be honest, credit cards are   convenient, but they can also encourage bad spending habits that may lead to   financial trouble down the road.