June 29, 2017

Credit Cards, Savings, Cheque & Money Market Accounts – Banking

credit card accounts

if you are looking for the convenience of paying for your purchases without bringing any cash, you should consider getting a credit card account. a credit card is your friend during shopping sprees, going to the supermarket, emergencies and other personal necessities. with just one swipe of the card, you can pay for the things that you need. that is convenience in your hands.

you should also consider that using a credit card is in effect borrowing money that you have to pay at a certain time.  if you do not pay at the allotted time period, the balance will be charged an interest rate which is quite high.

you have to consider that there might be promotions to use credit cards and get reward points. this is to keep you using credit cards. you need the discipline to buy only what is necessary. having a credit card can tempt you into impulse buying. then when you get home, you wonder why you bought so many items on sale.

you have to consider that a credit card is a handy thing to carry since it is safer than bringing cash. however, responsible use of this is important to avoid financial problems.

savings accounts

if you are looking for a good way to build up your money, you should consider putting your money in a savings account. always save for a rainy day is what our parents told us. this is true since one can never tell when an emergency will come up.

you should consider that if you have savings in the bank, you will avoid getting high interest loans. you will be able to pay your credit card loans on the due date. when you need to buy big ticket items like a car or a house, you have the funds to draw on from.

you should also consider that savings accounts are not that high yielding as you would like it to be. the interest on your money might not be big enough to live on so you need other investments. the money you will put on a saving account should not be parked too long on an ordinary savings account. you should also consider moving your money in and out into other higher yielding investments.

you should do your research on how its best to make use of a savings account and continue the habit of saving for the present and the future.

cheque accounts

if you are looking for a way to pay other people without bringing money, you should consider opening a cheque account. a cheque account is a convenient account to have just like a credit card account. however, a cheque account is dated on the same date it was issued. the exception is when the account holder issues postdated cheques for big ticket items like a real estate purchases.

you should consider that cheque accounts are a bigger responsibility than credit card accounts. issuing bouncing cheques have a stiff penalty. a cheque that is issued on a certain date should be covered right away unlike a credit card where there can be a balance on your account. it is therefore advisable that you maintain sufficient money in your cheque account and you know how to balance your account before issuing a cheque.

you should consider that a cheque is a promissory note to pay. your signature is the only guarantee that binds that promissory note. be careful to honor whatever you put your signature on. your credit history will be affected if you issue bouncing cheques or if your cheque account is closed due to bad record-keeping.

money market accounts

if you are looking for a higher yielding place to put your money, you should consider opening a money market account. a money market account is a safe place to put your money with an interest yield higher than a savings account.

a money market account is basically a savings account with check writing privileges. it typically earns 4%-5% rate of return. it’s great to use as a emergency fund, but not great as a investment vehicle.

you should consider that the yield may not be as big as other investment vehicles but the risks are lower also. this offers a higher yield than savings accounts but not as big as mutual funds.

you should also consider that for a shorter term, more liquid and completely safe investment, money market accounts are worth it. as a long term investment, no, they are not worth it. it is a great place to put an emergency fund, or money you plan to use in the next year or so.

you should consider other investment options as well along with your money market account. money market accounts will offer you a short-term solution but look at the long-term view as well.



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