The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

MONEY MANAGEMENT Wednesday February 1M Page Credit card costs vary dramatically Credit cards may all be created equal to the extent that theyre all the same size and shape and all made of plastic But thats about as Tar as equality goes because cards are all over the map in interest rates charged annual fees grace periods and any number of other differences Some 16000000 Canadians cany at least one card and their total outstanding balances are well over billion Cards fall into four main categories There are the bank cards issued by chartered banks and other financial institutions retail stores cards those issued by gasoline retailers and the travel cards which the issuers promote primarily to business travellers No common ground The costs terms and conditions vary greatly Ihe huge range of cards available Eveh cards with common names in one of the two most familiar groups Visa and Mastercard differ widely from one institution to another For instance annual fees for Visa and Mastercard can range from zero to a year Not much dif ference True but you need to con sider that starting point in conjunc tion with the interest rate on unpaid balances from a low of about 14 per cent to nearly 19per cent all calculated daily One bank has three different rates for different types of Visa transactions Many but not all bank cards also charge a per- fee up to a monthly maximum State Heres why everyone should have a valid will of grace Also bear in mind the grace period Thats to say consider when the meter starts running and interest starts to accumulate Some cards allow a grace period of 21 days from the date of the transaction Others allow 15or21 starting from the date of state ment If you pay the total billed within the grace period you can avoid in terest altogether But if you make only a partial payment no matter if its almost everything owed youre charged interest on the whole amount from Day One Storecards up to 288 In contrast most department store cards have no annual fee But hey levy a whopping per cent rate of interest although not uniii Its one of those things too many of us are likely to put off But neglecting to make your will is potentially serious for your family and others you want to remember In fact its easy to prepare your will and once its signed and put away in a safety deposit box you 11 have die satisfaction of knowing youve done the right thing And youll be sure your family will be spared the kind of hassles that can develop when someone dies intes tate If there is no will at death the Sur rogate Court in your province will appoint an executor and there is no guarantee it will be someone of whom you would In any event the distribution of your is then entirely at the discre tion of the executor according to the law but not necessarily accord ing to your wishes because there was no legal record of what you wanted If youve been dragging your heels in the will department it makes good sense to remedy the problem as soon as possible Al most always you should ask your- lawyer to help for although do-it- yourself wills are legal in most parts of Canada they can lead to problems your beneficiaries really dont need Do your homework Before you go to the lawyers of fice its a good idea to do some homework That means assembling details of all your assets plus loca tions and numbers of all insurance information and any support arran gements outstanding for ex- spouses and children from previous marriages Most trust companies provide helpful booklets to show you whats needed You should also give some thought to whom you wish to name as your executor the person who makes sure your intentions are car ried out after death Then equipped with all the infor mation needed your lawyer will be able to draw up the actual will list ing your bequests and specifying the disposition of your estate One last word Most lawyers recommend reviewing your will every three years or whenever your circumstances change For ex ample your net worth may increase or you may change your mind about a bequest if you marry or remarry your will is automati cally invalidated so that a new one should be drawn up without delay Pension income still eligible for RRSPs If youre in the fortunate position of having more pension income than you need youll definitely want to consider sheltering all or part of it in your RRSP especially since 1989 is the laslycaryoul be able to top up in this way For tax years and 1989 but not after that you can transfer all or part RRSP in addition to your regular contribution limit And for this pur pose pension income includes Canada Pension Plan and Old Age Security payments as well as in come from registered pension plans and annuities Better yet your spouse can also transfer all or part of his or her pen sion income into an and if this is the only income your spouse has you can take full advantage of the married exemption But notwithstanding all of that there may be a fly in the ointment in the form of the new Alternative Minimum Tax Pension in come transfers could affect you ad versely under the AMT provisions You may very well be entirely in the clear and benefit from the full amount Or these transfers might trigger only minor AMTIiabilityso that you still come out ahead on balance In order to rind ou exactly what your position will be its a good idea to get expert advice from your tax adviser days after the date the monthly statement is issued Most gasoline company cards run up interest or delinquency char ges at 24 per cent starting 25 days after the date of the monthly state ment Most calculate interest on a daily basis loo rather than on the monthend balance The travel cards American Ex press En Route and so on charge hefty annual fees of anywhere up to 45 a year or more for prestige cards offering VIP facilities and ex tended lines of credit Interest can be anything up to 30 per cent Choose card with care So you can see the cost of using cards of all types is literally all over the map Yet few people realize how great and cosily the dif ferences between die various cards can be 1 makes good sense to check care fully just what youre getting when you sign up for a card and how much its going to cost Then con sider factors like convenience and extra services and decide how much these features are worth to you Never assume that the dif ference between the costs of dif ferent cards is too small to worry about because if you do youll be wrong and can end up paying very much through the nose The best advice of all of course is enjoy the convenience of your card but avoid all interest if you possibly can That means paying the amount due before the end of the grace period Youll be glad you got out of the insidious minimum monthly pay ment habit Richer too MONEY CONCEPTS Tax Shelters iStocksBondsl Hard Assets Mutual Funds Education Fund TaxAdvantaged Investments Emergency Fund Reduction of Debt Personal Risk Management Information Gathering Financial Planning Pyramid of Success FEES Call 8731877 for a FREE CONSULTATION CO CONCEPTS HALTON HILLS GEORGETOWN