Interest rates

[Marker]

2% monthly is more than 24% annual when compounded, my unsecured LOC is around 6% annual. If you are not using the LOC you could just close it.

[Sharon]

Exactly. I've found another card at 16% and no annual fee. Will go with that.

[mosquito]

as long as it isn't BMO

[trimmer21]

2% monthly is more than 24% annual when compounded, my unsecured LOC is around 6% annual. If you are not using the LOC you could just close it.

If it's an "unsecured" LOC....yes,but,if it's secured by your home equity,reduce it to zero and consider using it as a hedge against mortgage theft or fraudulent conversion. Because it's a registered instrument,nobody can convert it at a Land Registry Office without the bank's due diligence. The more checks and balances,the better. Mortgage theft is still a huge problem in Canada.

[Bo D]

Sharon, check out TD. Over 65 no monthly fees. No fees on interact either. If you have a credit card and you aren't carrying any debt and pay it off monthly why do you need a line of credit. Money grab from the institutions. My bank told me I don't need it and save myself $50.00 a month. Like others have said, shop around.

[Sharon]

Thanks. Looking into that.

[mosquito]

If it's an "unsecured" LOC....yes,but,if it's secured by your home equity,reduce it to zero and consider using it as a hedge against mortgage theft or fraudulent conversion. Because it's a registered instrument,nobody can convert it at a Land Registry Office without the bank's due diligence. The more checks and balances,the better. Mortgage theft is still a huge problem in Canada.

We got our mortgage split between a traditional mortgage and the Line of Credit, we would pay off a bit against the Line of Credit when we could and each January use the Line of Credit to max a payment against the mortgage part. We were able to reduce the mortgage part faster and reduce the line of credit when we could, saving us thousands.

Sharon, check out TD. Over 65 no monthly fees. No fees on interact either. If you have a credit card and you aren't carrying any debt and pay it off monthly why do you need a line of credit. Money grab from the institutions. My bank told me I don't need it and save myself $50.00 a month. Like others have said, shop around.

A line of credit from the bank secured against the house costs nothing, costs between 3 and 4% and is there for shortfalls, tax installments, renovations and if necessary paying off an especially large credit card bill etc.

Scotia has several no fee cards and low interest ones (not important I think, just pay it off with LC instead).
http://www.scotiabank.com/ca/en/0,,36,00.html

The Canadian tire ones have Canadian Tire money or cash back and if you pay them off on time (using the bank LC if necessary) the interest rates don't matter.
https://www.ctfs.com/Products/CreditCards/

[fishermccann]

If you have a line of credit on your house, you pay more for house insurance. We did, look into it.

[JBen]

Waaaaaaay to much

Sharon go into your branch and talk to a specialist/advisor. If they are any good they will go over various options with you, crunch numbers with you and then you can make the most informed decision with respect to your money and whats most cost effective for your life.

Different kinds of credit, carry different kinds rates etc.
http://www.bmo.com/home/personal/ban...line-of-credit#

In a nutshell, loosely speaking
Credit cards have the highest rates, because the risk (credit default) to the bank is greatest. As the risk to the bank drops so does the rate you pay.
Unsecured LOC
Car loans
Secured, or home equity (other)
mtg

The reason closed are cheaper than open credit (you can pay down whatever you want) is because financial institutions like to know how much $$ is coming regularly (closed) versus irregular (open) where it can be 0.00 against the principle or the entire amount.

Unsecured LoC and secured are generally Prime plus X. As prime moves so does you rate/minimum.
http://www.bmo.com/home/personal/banking/loans-loc/loc

Marker are you sure 6% is unsecured?
Prime is currently 2.85%
Prime plus 3 would I think be more in line with a secured.

[Marker]

[Marker are you sure 6% is unsecured?
Prime is currently 2.85%
Prime plus 3 would I think be more in line with a secured.[/QUOTE]

Yes. Unsecured means that if I don't pay the loan the bank does not automatically have title to any of my other assets (ie house) which is more risk for the bank than a secured loan against another asset. My mortgage, which is secured on my house is at prime less .75%, my unsecured line of credit is prime plus 3% to make it approx. 6%, my credit card is 10% but I get heavy fees each month. As the loans become more risky the interest rate increases.