Many of us will spend hours reading reviews and comparing products online when we shop for electrical items or home appliances, but when it comes to mortgages and credit cards, we can be too spontaneous.
While over 80% of people now read online reviews before purchasing products, consumers may not be aware that it’s possible to research financial products extensively too.
Statistics show that 79.6 million credit cards were issued in Canada in 2018.
It is also estimated that over 4.8 million Canadians have a mortgage.
If you’re thinking about applying for a new credit card, or you’re looking to take out a mortgage to buy property, undertaking research is crucial.
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What to consider when getting a credit card or mortgage
There are several reasons why it’s beneficial to do your research before applying for any kind of financial product.
These include:
Finding the best rates and deals
If you take a moment to search online for credit cards or mortgages, you’ll be greeted with pages of links and adverts all promoting different products with varied interest rates.
It may seem like the simplest option is to go with the first advert you see or to click on a link that looks enticing and sign up, but it’s advantageous to explore further afield.
Rates vary considerably between different banks, organisations and lenders, and it’s important to find the best offer for you.
By using comparison sites and seeking advice from financial experts, you’ll have access to a wider range of products and lenders, and you might be able to find a much better offer, which suits your individual requirements.
Exploring different products
On the surface, it might seem like all credit cards and mortgages are the same, but if you delve deeper, there are key differences, which could make one product much more appealing to you than others.
Look out for features and always read the terms and conditions carefully.
You want to focus on finding products that are suitable for you and that match your individual needs and preferences.
If you’re searching for a mortgage, for example, researching early payment options, looking into potential charges and fees and exploring lender criteria will all help you to make a well-informed decision.
When analysing features, think about whether or not they are relevant or attractive to you before you decide which product to choose.
Understanding the influence of your financial status and spending habits
When you’re shopping around for a credit card, a loan or a mortgage, it’s useful to take your spending habits and your financial status into consideration.
Are you somebody who pays off debts as soon as they appear on your statement, or do you tend to overspend on a regular basis and make the minimum card payment?
If you are diligent and you pay off a credit card balance every month, applying for a card that offers rewards like cashback may be an appealing option for you.
If you’re not somebody who pays off substantial chunks on a regular basis, it’s best to avoid high-interest cards.
When you’re already in debt, it might also be worth looking at secured cards that enable you to make protected purchases without amassing more debt.
According to Transunion, the average credit card balance is set to increase to $4,465 by the end of 2020.
Making the right decision
Before you submit an application to a mortgage lender or a bank, it’s so important to take your time to gather information, to compare products and to deliberate.
You can use online sites and resources and you can also seek advice from a financial expert.
Every customer has different objectives, and there are several factors that can influence the decision-making process.
Your financial situation, your spending habits, your employment status, your income and your credit rating will all have a say in which financial products are best-suited to you.
Researching provides clarity, and it can help to ensure you find the best deals and offers for you and make sure you understand the terms and conditions involved in borrowing.
Summary
If you’re getting a credit card or a mortgage, research is incredibly valuable.
Compare lenders and products, focus on your individual needs and get to grips with the terms and conditions.
Information on Consumer Proposals
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Bankruptcy FAQs
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Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?
