Costs of credit

There are countless borrowing opportunities and credit is very available and tempting. But beware: rash, improper use of credit comes at a very high cost.

Credit charges represent the amount of interest you will have to pay on your loan. The total cost of your credit purchase will be influenced by the amount you borrowed, the interest rate Interest rate: Amount charged or paid for the use of money, expressed as a percentage. Investors receive interest for letting others use their money and borrowers pay interest to borrow money.   and the repayment term.

The more you borrow, the more the loan will cost

Interest due is obviously higher when calculated on a large amount.

Example:	A $2,000 loan Loan: Amount of money lent for a predetermined period of time. , at 10%, repaid over 2 years costs $215
	A $4,000 loan, at 10%, repaid over 2 years costs $430

The higher the interest rate, the more the loan will cost

Some companies charge outrageous interest rates. ALWAYS check the interest rate before you take out the loan.

Example:	A $2,000 loan, at 10%, repaid over 2 years costs $215
	A $2,000 loan, at 30%, repaid over 2 years costs $683

The longer the repayment term, the more the loan will cost!

You might be tempted to spread your payments out over a longer period to reduce your payments, but it will cost you more in the long run.

Example:	A $2,000 loan, at 10%, repaid over 2 years costs $215
	A $2,000 loan, at 10%, repaid over 4 years costs $435

Remember, these examples are calculated on the basis of monthly payments. Payment frequency (e.g., weekly, bi-monthly, monthly, etc.) may also affect the total cost of the loan.

Credit charges with the VISA Desjardins card FOR STUDENTS ONLY are very attractive when you use your card wisely. In fact, if you pay your entire balance before the due date on your statement, no credit charges will be billed to you and you benefit from a grace period. But if you pay only the minimum monthly amount, you will have to pay interest at the current rate on all your purchases.

• Pay your entire bill: no credit charges.
• Pay quickly: less credit charges.

To find out more about VISA Desjardins card FOR STUDENTS ONLY

Avoid needless credit charges: only use your credit card when necessary and make sure you pay your entire balance before the due date.