A study reveals that financially literate people are less likely to experience financial anxiety and money stress. Getting familiar with the basic credit card and financial concepts can help you make sound decisions and improve your credit score.
At the Great Canadian Rebates, we strive to help you make well-informed credit card decisions and choose your credit card wisely. Our website not only allows you to compare different cashback credit cards but also learn about the latest financial concepts.
This blog is your ultimate cheat sheet to the most basic yet highly significant financial and credit card concepts.
Debt or Liability
The money you owe to your lender is called debt or liability. It’s the sum of all the payables that you still haven’t paid. Debt can be a pending utility bill, credit card bill, house rent, or college fee. While it may sound negative, debt can also have a positive impact on your financial rapport.
Experts count a house loan or a college degree loan as good debt as they prove you as a low-risk borrower with a sound goal.
Interest
Interest is possibly the most important financial concept everyone must know about. Interest can be earned or paid. In the simplest terms, interest is the cost of borrowing money. It’s commonly denoted by APR or Annual Percentage Rate in credit reports.
You should look for credit cards and other credit accounts that offer low interest to ensure smaller monthly payments. On the contrary, you’d want saving accounts, CoD, and checking accounts with higher interest rates to earn good cash.
Credit Ratio or Credit Utilization
Your credit ratio is the amount of money that you owe on your revolving credit accounts.
It’s also referred to as the debt-to-credit ratio and is calculated by dividing total revolving credit by the amount of available credit. Some common examples of revolving credit accounts include credit cards and personal credit lines.
Balance Transfer
Whenever you apply for a new credit card and transfer your current balance to the new credit with an 0% introductory APR or interest, it’s called a balance transfer. Balance transfers have a longer payment duration and offer you more time to pay off your credit bills.
You should look for rewarding balance transfer cards and cashback credit cards for better balance transfer terms.
How Can Great Canadian Rebates Help You?
As a leading, online credit card-finding platform, Great Canadian Rebates allows you to compare the best Canadian credit cards. Visit our website to find a credit card that fits your needs perfectly!