While we usually like diving into detailed answers to the financial questions we receive, sometimes we can answer questions succinctly. Here are three questions and our rapid-fire answers.
I have credit line debt. Currently around $40,000 at 12%. Can I approach another bank and get them to take it over at a reduced rate?
Yes, definitely. Competing banks and credit unions will often be happy to offer you a loan or line of credit at a lower rate than what you are currently paying. As far as the new bank is concerned, it’s a win-win-win situation. You get a lower interest rate, the new bank makes money off the interest you pay on the new loan, and the old bank gets their money back from the original loan. Everyone gets what they want.
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Is a high credit score useful if I don’t plan to borrow money and don’t need a mortgage? Is there anything I can do to leverage a good credit score?
A credit score is an indicator of how much financial institutions trust you to pay your bills and pay down your debts. Banks and other companies will often look at your credit score (and corresponding reports) to determine whether to loan you money or, sometimes, to determine the interest rate they will offer you on a loan.
Since a credit score just determines how attractive you are as a borrower, there isn’t really anything you can do with a good credit score when you don’t plan to borrow money. If you have existing loans you could use a high credit score to shop around for a lower interest rate. (See above question and answer.)
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Can I get cheques that withdraw money from my credit card balance?
Yes, most credit cards will allow you to request cheques to use against your credit card limit. This may involve paying fees or a special interest rate for the use of the cheques. Please make sure to read your credit card agreement before using any cheques connected to your card to make sure you know what fees or interest rates you might end up paying.
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