We looked at the Best of the Best for Chequing Accounts and the Best of the Best for Savings Accounts, now we’re reviewing the bank websites and their special educational content.

All the big five banks include details about their various accounts, current mortgage rate info, tools like mortgage calculators and budget planning strategies, branch locators, and a search function to help you find what you’re looking for. But not all sites are created equal. Here’s what I think about each of the sites and their special features.

Bank of Montreal (BMO)

The site starts on a very busy home page that includes a search function at the top left and, below that, tabs for rates and “tools and calculators.” The later includes calculators for mortgage payments, TFSAs, loan payments, and retirement planning. Click on any and you’ll get a pop with a basic calculator tool that’s pretty easy to use.

For more detailed info, you’ll have to delve into the “Personal” section or select one of the somewhat cluttered options on the screen, like “Buying my first home,” which leads to a trove of information from a “Mortgage Basics” glossary to PDF worksheets you can printout for offline number crunching.

Special Feature - BMO customers can sign up for the bank’s MoneyLogic Guide, a free online budgeting tool that allows you to sync all your BMO accounts to track your monthly budget and savings goals. You can view your progress in charts and graphs, or download a PDF to print off.

Canadian Imperial Bank of Commerce (CIBC)

A cleaner homepage includes key links stacked at the left (Bank Accounts, Credit Cards, Mortages, Investing), a search at the top right, and timely reports from CIBC experts, like the four-page PDF, “Year End Tax Tips.”

Special Feature - CIBC’s Advice Centre – reached via a prominent tab at the top centre of the homepage – includes multiple video clips and articles on a broad range of topics, from “Reducing Your Debt” and “Home Ownership” to “Family Finances” and “Retirement Planning.”

Royal Bank of Canada (RBC)

RBC’s global reach (it’s the biggest of the Big Five) is evident right from the homepage which has separate tabs at the top for operations in Canada, the U.S., International, and Caribbean (which apparently isn’t considered “international”), and its various divisions – RBC Insurance, Capital Markets, Wealth Management, and so on. For all that, it lacks a search function on the homepage. The downside for users is that you have to dig deep to get the info you want.  The advice center is pretty good, but the videos are a bit too sales focused for my liking.

Special Feature - Most of us worry about our online security, but probably don’t do enough to protect ourselves. RBC has prominently placed a “Privacy and Security” section on the main page, with detailed advice on how to protect yourself online, avoid common scams, and prevent identity theft. There are even easy links for reporting a suspected phishing scam. (Though the guy who automatically pops up in the lower-left and starts telling you more…can be a bit jarring if you’re doing some late-night research.)

Scotiabank

Scotia’s site features the cleanest design – when visited in early December, the page was dominated by an image of an elderly gentleman with his grandkids. Above that, are seven dropdown menus, including credit cards, borrowing, and rates, that bring up multiple relevant tools and explanatory articles.

Special Feature - Scotia Online employs a mix of short articles and embedded YouTube clips to explain things, but it does seem a little more geared to specific details on the company’s products as opposed to more generic personal finance education. That said, highlights include an accessible glossary of banking terms, and a Future Value Calculator that lets you see how much a regular investment contribution will grow over 20 years at various estimated rates of return.

TD Canada Trust (TDCT)

If you have an aversion to green – the colour, not U.S. dollars – this site is not for you. (I counted four different shades.) But we’re here for financial advice. And TDCT does provide a lot; you just have to discover the “Planning” tab on the home page to find the info you’re looking for.

Special Feature - TDCT’s Planning section is the go-to part of their website for a broad range of financial advice. Articles range from overviews on how to organize your finances – and what you hope to achieve – to savings calculators to help you reach your goals. Back on the homepage, TDCT also includes a News link if you’re interested in getting the bank’s Daily Morning Market Update or signing up for RSS feeds.

Highlights from the not-so-big banks

Customers of PC Financial (a CIBC subsidiary, run through Loblaw grocery chain) can sign up for a monthly Financial Aisle Newsletter that includes tips like: “Remember that legitimate institutions will never ask you to confirm or to disclose personal financial information like PIN numbers or social insurance numbers over the internet.”

ING Direct has a number of online tools, including the Rent Translator that quickly shows what your monthly rent payment would equate to in terms of a mortgage, including a table that shows how much you’d pay it down year-by-year.

Anyone who’s opted to bank with Ally Canada will appreciate the icon at the top left of the page that tells you the wait-time for the telephone help line. It’s a lot quicker to log onto the site than punch in all your account info and follow the phone prompts only to discover “we’re currently experiencing higher than normal call volume…”

Some people are naturally good with their money. They spend less than they make, and they’re able to put money away without the temptation to spend it – but not me. I’ve always been bad with my money; it controlled my life for years.

Six years ago, I found myself in a desperate situation: I was 24 years old, broke, and living in my parents’ basement. My part-time job paid me $9/hour, and my $20,000 in student loan and credit card debt never seemed to go away. In fact, I could barely make the minimum payments.

The day my life changed was when I couldn’t even afford to take the bus to work. I realized that my debt was holding me back from the life I wanted for myself.

The first thing I did was learn to create a budget.

I know what you’re thinking – budgeting is boring and cumbersome – but stay with me, because if you need to do some serious damage control to your personal finances, chances are that simply by creating a budget, you will get to where you want to be.

Budgeting isn’t as bad as you think. It doesn’t mean you have to cut out every single fun thing you will ever do in your lifetime. In fact, it’s the opposite! It’s about taking control of your money, understanding where your money goes, and realizing what you truly value in life.

When I was in debt, I spent money I didn’t have. I wanted to experience everything, and have fun. You only live once, right? Money is made to be spent! I found a way to justify every single purchase, without thinking about the repercussions. Then, one day it hit me: I was literally spending my future away.

Here are 5 simple steps to help you create a budget that works:

Step 1: Figure out what you want

Make a list of your short-term and long-term financial goals. Do you want to get out of debt, buy a house, or take a vacation? Understanding why you are budgeting will help you focus on what you need to do to achieve your dreams.

Step 2: Determine your monthly income

Calculate how much cash flow you have coming in on a monthly basis. Aside from your full-time job, you should factor in money made from a part-time gig, freelance work, government assistance, child support, or any other form of reliable, steady income.

Step 3: Track every dollar you spend

Grab your smart phone (or a notebook) and spend an entire month tracking every dollar you spend. Every time money leaves your possession, you need to record it. You might be surprised at what you find! It might be hard to admit that you spend $60 a month on tanning, or $50 on the gym pass you don’t use, or $300 on gas for your car – but it’s all valuable information that you will need.

Step 4: Figure out how much you are spending

Start by subtracting your monthly spending (step 3) with your monthly income (step 2). The money left over each month should be going towards both your short-term and long-term goals.

If you find that you are spending more than you make, or don’t have enough money to put towards your goals, you can either cut back on your spending, or look to increase your income.

Step 5: Revisit your budget often

Because your expenses will most likely vary from month to month, revisiting your budget often is a good idea. This will ensure that you are on track with your goals.

Budgeting isn’t a dirty word, and it isn’t about penny pinching and deprivation! It’s about the freedom knowing that your money doesn’t control your life. You decide where and what you spend your money on – and that’s a very liberating feeling.

The next two months will tell if we’re truly ready to loosen the grip on our purse strings. According to the Global Hunter Securities Holiday Sales Preview for 2009, we’re expected to see a 1% increase to a 1% decrease of sales between now and a year ago. This is promising considering 2008 saw a 7.6% decrease in sales from 2007.

As reported by RetailSails.com, a website dedicated to tracking retail trends across the country, retailers saw a depressing season in December 2008 in terms of the amount of people spending money. According to RetailSails.com, the average merchandise sales in 2008 from June to September were $374 billion, while December 2008 sales were $136.3 billion. And retail sales have remained quite low since January 2009, continuing to fall each month.

The economy is recovering and consumer confidence has increased over the course of a year, but some of us may still be a little shell shocked when it comes to handing over our credit cards to retailers. Regardless of whether or not we use it to make payments this holiday season, with 68.2 million Visa and MasterCard cards in circulation throughout the country, the credit card is still very much alive in Canadian households.

According to Stats Canada, 84% of Canadians have credit cards. Of those, a staggering 85% have reported that they have outstanding debt on those credit cards. But the good news is that 70% of us pay off our cards in full each month. Even still, a surprising 24% of us use them daily. The next two months will tell if these numbers will increase or decrease.

Even if you’re thinking about replacing your credit card with cash this holiday season, you may not want to give up on that piece of plastic sitting in your wallet quite yet. There are benefits to using credit, so long as you use it responsibly.

What are the benefits of a credit card?

The credit card, a convenient financial management tool accepted in 170 countries and at 30 million locations worldwide, provides consumers with an easy and safe payment solution without having to carry around large amounts of cash. With a credit card, consumers have access to credit that doesn’t require collateral against amounts charged. Charges remain interest free from the time of purchase to the end of the billing period. Therefore, a consumer has one month to make a payment without seeing a penalty. Credit cards also protect you against fraud with zero liability. So if someone steals your card and charges it, in most cases you’re not held responsible. But if someone steals your cash, you’re out of luck. Some of the most popular credit cards let you benefit from reward programs such as air travel, grocery purchases, car insurance and much more depending on the type of credit card you sign up for.

In addition to the obvious benefits of owning a credit card, you also have the chance to build up a positive credit rating. Using one responsibly will prove you are dependable when applying for jobs, insurance coverage and car and home financing. It’s very important to prove to lenders that you are aren’t a risk to them financially.

But what are the costs of a credit card?

While owning a credit card has its benefits, it’s important to be aware of the costs as well. Every credit card has its own interest rate and penalty rate. And every purchase you make will fluctuate in cost depending on that interest rate and on your repayment habits. The amount on your receipt may just be more than what you’ve bargained for.

For example, let’s say you purchase $200 in gifts this holiday season with your credit card but can only afford $50 a month to pay it off. If you’re using a Visa or MasterCard, the average interest rate you’ll be paying is 18%. On top of that, you must pay an effective annual rate (EAR) of 18%. In the end, if you make your payments on time and the interest rates remain the same, you end up taking over four months to pay off your debt and will in fact have paid $207.79 rather than the original $200.

Now using a store card can be worse if you’re not careful. Let’s say you purchase $200 in gifts using your retail store card. Store cards often carry higher interest rates, averaging 28% and in this case, your EAR will be 31.89%. Assuming you pay $50 a month on time and interest rates don’t shift, you end up paying a total of $212.40 for your original $200 purchase.

Being aware of these extra costs will save you from ultimately spending over your limit and finding yourself in credit card debt. The Government of Canada’s Cost of Borrowing calculator provides easy to understand information to help you determine how much you’re really paying when you use your credit card.

Don’t just settle on your current card. Shop around.

Even if you think you’re going to always make your payments on time, unexpected situations occur and bad repayment habits often prevail. That’s why it’s important to shop around for a card that works for you.

Banks, as well as hundreds of other institutions including credit unions, retailers, finance companies and trust companies across Canada offer consumers a range of different products to choose from when it comes to selecting a credit card. Understanding your circumstances and requirements will help you to more easily select the right card for you.

Below is a list to help you when shopping around for the right credit card:

This holiday season, it’s important not to succumb to the urge to splurge. Replacing credit with debit and cash is a wise decision for those already playing in the game of debt. But if you’re thinking about using credit, remember to approach it like a loan and not “free cash”; only spend what you can afford and be ready to make your payments on time. There are numerous benefits to using credit cards, so long as you use them wisely.

Caroline
PR@RateSupermarket.ca