After Graduation
Should I get a student line of credit or a student loan?
What are pros and cons of getting a student line of credit from a bank rather than taking out a student loan?
This need not be an either/or decision. Many students get government-sponsored loans and then arrange a bank line of credit if they need more money. As explained here, there are two types of government loans: federal and provincial. Here are the major differences between them and a student line of credit (LOC) from the banks:
• The LOC is more flexible in that you can borrow only what you need and make repayments in any amount at any time. If you do not qualify for credit on your own, you will need a co-signer who becomes responsible for the outstanding balance if you default.
• The government loan has a fixed interest rate. The LOC rate is based on the prime rate, which fluctuates. If you compare rates today, the LOC rate will likely be lower, but there is no guarantee that it won’t float higher over time.
• The government loan requires no payments while you are in school. You can then delay payments for 6-30 months depending on your situation. The LOC often (but not always) requires you to pay interest monthly, even while in school. Some lines of credit offer grace periods of up to a year after graduation before you need to begin repaying the principle on your loan
• Interest paid on a government loan generates an income tax credit. Interest paid on a bank’s student LOC doesn’t. Many students do not realize this until it’s too late.
Many schools have arrangements with banks that offer student lines of credit. The financial assistance office at your school might be able to provide a loan versus LOC comparison for your specific situation.
Content provided by InvestorED.ca, an independent non-profit created by the Ontario Securities Commission to help people make effective use of financial information.
Canada’s Top 100 Employers
SPECIAL REPORT: Where you should be dropping off your resume
It wasn’t long ago that tech companies were seen as the vanguards of what great employers should be. An ideal working environment circa 1999 was measured by the number of foosball tables on offer, while business attire consisted of jeans and T-shirts. Few appreciated the reality: techies dressed that way so they could easily flop out under the nearest foosball table after 16 hours at the keyboard.
These days, that won’t cut it. Take Next Level Games, a small but fast-growing Vancouver video game developer that appears for the first time on this year’s Top 100 Employers, as compiled by Mediacorp. In an industry famous for chewing through workers, Next Level tries to strike a balance between work and life, offering some of the most lucrative parental benefits around and attractive vacation time to start. This is what it takes to be considered among the best employers in Canada. And the bar is only getting higher.
Thanks to the tight labour market, quality workers are now asking not what they can do for their bosses, but what their bosses can do for them. Hundreds of employers are answering the call, as this year’s list attests. But what it also reveals is just how fast and dramatically the modern workplace is changing.
Over the past year, Richard Yerema and his team at Mediacorp pored over thousands of pages of material from more than 1,800 organizations to identify the very best. This is perhaps the most in-depth analysis of human resources trends in Canada’s public and private sectors available anywhere. It’s not a ranking, but a compendium that aims to shed light on what the best employers are doing to retain talent. Mediacorp will publish its full report of the Top 100 employers in book form this coming spring.
Since Maclean’s first partnered on the project seven years ago, remarkable trends have begun to emerge in the benefits employers offer. True, a competitive paycheque remains paramount. But Mediacorp’s analysis shows it takes creativity, more than big budgets, to be the best. “There are smaller employers you might never have heard of who are trying things and realizing that they can offer industry leading benefits,” says Yerema. “You don’t have to be big to be good.”
Some of the biggest changes have been in the benefits offered to new parents. In 2000, when Ottawa doubled maternity leave to a full year, only a handful of companies topped up payments to help out families. Now the majority of employers on the Top 100 kick in, with some covering as much as 95 per cent of an employee’s benefits while on maternity leave. It’s not just moms getting a better deal either. Today half of all employers on the list top up payments to fathers, double the figure just two years ago. Helping matters is a sea change in the way employers view the virtual workplace. Many leading organizations now accommodate staff who wish to work from home by tapping into the boom in telecommunications. Fully 82 per cent of employers on the list let people do some work from home, up from 65 per cent in 2004.
What happens if I don’t pay my credit card bills?
I know I’m supposed to pay my credit card bills, but I’m wondering: what happens if I don’t?
Although you might think that it is an easy oversight to miss a credit card payment, the repercussions will be with you for years. Credit cards can hold nasty surprises including interest rate hikes and worse if you miss a payment, so you need to put together whatever resources you can to pay your monthly bill- even if you can only make the minimum payment.
It goes without saying that paying the minimum payment is an option in only one situation- that is if the alternative is not paying anything. In either case, if you find that one of these options is necessary than you need to need to think seriously about whether you can afford your lifestyle.
There are four stages of woe if you default on your credit card bills:
1. Your card issuer will inform the credit bureaus and your rating will be reduced, making it much harder and/or more expensive to get credit in the future. This default will be on your credit record for the next 6 years.
2. Many credit card companies have terms that change if you miss a payment- eg. your reasonable introductory rate of 7% could go up to 18% or more.
3. Your card will be put on hold and won’t be able to use it until it is paid off
4. If you have a savings or chequing account at the bank that issued your card, in some cases the card agreement may allow them to take money from your accounts to cover the outstanding credit card bill.
5. If you don’t pay for a long enough period, the bad account will be turned over to a collections agency. At this point, your credit rating will be exceptionally low and you will have long-term repercussions-
The hassle of any of these issues will live with you for years and will have an impact if you need a loan for things like student debt, a car, a wedding, a house or anything else down the road. The consequences are serious- don’t wait to pay it off, and pay it all off every time.
Content provided by InvestorED.ca, an independent non-profit created by the Ontario Securities Commission to help people make effective use of financial information.
