That darn monthly fee again!

Some banks require customers to open a chequing account when they open a line of a credit. The objective is to gain the sweet recurring revenue from the monthly fee of the chequing account.

Some people use line of credit as an emergency fund. The interest rate is so high, so the cost of borrowing is much higher than before. Some consider putting cash away for emergency fund is a luxury that they can’t afford. I understand where they are coming from. Many have experienced financial hardship. When they have extra cash, they would pay off mortgage or contribute to RRSP or RESP. All are worthy causes. Given such high interest rate now, I still recommend a more careful approach by saving 3 to 9 month living expenses as cash in an high interest saving account.

The key is to avoid that monthly fee. You can open a no-fee chequing account from an online bank where you can withdraw cash easily. Make sure the bank also offers a line of credit with attractive rate and a saving account with good interest rates.

After it is all done. Close that chequing account with monthly fee and that line of credit ASAP. Never pay for a cent that is not necessary! 😊

Published by Worthfy

Financial literacy and counselling

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