Mortgage Market for December 6, 2013

• TSX -104.52 to 13,200.40 (CP) pressured by the financial sector as the latest batch of bank earnings disappointed, giving traders an excuse to take some more profits from a sector that has delivered solid returns all year. "None of the numbers were bad per se, they just didn't knock the lights out and it's something that people got accustomed to with the Canadian banks," said Sadiq Adatia, chief investment officer of Sun Life Global Investment.
• Dow -68.26 to 15,821.51 as concerns about what the Federal Reserve will do with a key stimulus measure grew in the wake of more positive economic data
• Dollar +.33 to 93.98 US
• Oil +.18 to $97.38 US
• Gold -$15.30 to $1,231.90 US as the precious metal appeared less attractive on rising speculation the Fed will move sooner than thought to taper asset purchases.

Canadian 5 year bond yields markets +.03 to 1.80. The spread (obtained by subtracting the bond yield above from the industry average 5 yr rate published mortgage rate of 3.59) is within the profit range at 1.79. Investors are again tolerating a bit lower profitability. If the increase in bond yield continues upward, the spread shrinks, which could prompt interest rates to rise. The range for investor desired profitability is currently a bit lower in the region of 1.80 and 2.00.
http://www.marketwatch.com/investing/bond/tmbmkca-05y?countryCode=bx



8 potential pitfall of credit cards

Susan Johnston | U.S.News & World Report LP

Credit cards are convenient - and many offer rewards on purchases. But if you don't use credit responsibly, you can quickly rack up debt and decimate your credit score in the process. Here's a look at eight potential pitfalls to avoid.

1. Falling for marketing hype. When choosing a credit card, it's easy to get excited about a sign-up bonus or a card that contains the logo for your favorite sports team without thinking about how the credit card actually fits your spending habits. Is it accepted at the retailers you frequent? Does it have an annual fee? What's the APR? These details aren't as exciting as snazzy bonuses or logos, but they're crucial to consider.

If you've had credit issues in the past, a pre-approval offer might be tempting. But Curtis Arnold, founder of cardratings.com and author of "How You Can Profit from Credit Cards," says those pre-approvals are often a marketing gimmick. You might meet some kind of criteria set by the card issuer, but pre-approval offers are not a guarantee you'll actually qualify for the card or that it's the right card for you. Think about how you plan to use the credit card (Travel? Everyday expenses? Emergencies only?) and research your options to find the card that best fits your needs.

2. Skipping the fine print. Ignoring the fine print before or after you apply for a credit card can get you into trouble. "Too often, people skip the fine print and don't understand the fees that are involved," says Beverly Harzog, credit card expert and author of the forthcoming book "Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made."

Don't assume that the 2009 Credit CARD Act - which outlawed certain credit card fees and required issuers to give consumers greater transparency around other fees - will protect you from any and all credit card fees. "People could get a false sense of security knowing there's a new credit card law," Arnold says. "The laws don't protect us from everything. Our best protection is ourselves."

3. Making only the minimum payment. Just because you can afford the minimum payment doesn't mean you can afford all your credit card purchases. "Credit card companies are some of the best marketing people around ... when you get your bill, the first number on your bill is the minimum payment," says Bill Hardekopf, CEO of lowcards.com, a free consumer resource on credit cards.

Say your minimum payment is $42, but your total balance is $1,200. "A lot of people think, 'I paid the $42 so I'm good on my credit card,'" Hardekopf says. "No, you're not. Your balance is still well over $1,000 and getting charged this extremely high APR." If your interest rate was 18 percent and you made only the minimum payment of $42 on a $1,200 balance, you would wind up paying $713.79 in interest and spend 89 months digging yourself out of debt. Carrying a balance on a rewards credit card typically means even higher interest rates than regular credit cards.

4. Taking a cash advance. Cash advances and other cash-like transactions can start running up interest from the date of the transaction. Often, these may be subject to different interest rates than regular purchases. "There's a temptation to use a credit card in an ATM machine or use those horribly obnoxious convenience checks," Hardekopf says. Both can have extra fees attached, so avoid them if you can.

5. Ignoring statements and other mail. According to data from BillGuard, "grey charges" - charges that are technically legal but aren't always authorized - cost credit and debit cardholders more than $14 billion last year. These charges can include payments for a gym membership you thought you canceled or ringtones you didn't know your cellphone carrier had tacked onto your bill. Review your credit card statements regularly to avoid these extra charges, and try to resolve the issue with the retailer or, if that doesn't work, dispute the charges. "You need to go over your credit card statements with a fine-toothed comb to make sure that nothing's fraudulent and there's nothing you're unaware of," Hardekopf says.

Review other materials from your credit card issuer and continue checking the fine print even after you start using your new plastic, as interest rates and terms can change. It's probably not the most tantalizing mail you get, but Harzog recommends reading all email and snail mail from your credit company so you'll know about any changes.

6. Maxing out your cards. Using all your available credit not only costs you money, it can also lower your credit score because credit card issuers consider you a higher risk if your credit utilization ratio - the amount you've charged versus your total available credit - is above 30 percent. "You start to look like you're desperate, like you need the credit card to survive," Harzog explains. "Credit card issuers don't like risk." As a result, they may raise your interest rate, or they may try to reduce your available credit to rein in your spending.

7. Missing your due date. A credit card's grace period is the time between the end of a billing cycle and your payment due date. Miss the due date, and you may get charged interest or damage your credit score. "The due date really is the due date," Harzog says. "Set up something to remind yourself that payment is due on that day." This could be a calendar reminder or if you have multiple credit cards, you could ask the issuers to shift your billing cycle so the due dates are synchronized.

Arnold recommends automating credit card payments so you won't get foiled by a lost check or forgotten payment. "If you pay by mail, you can forget or go on vacation," he says. "Set your whole thing up on autopilot as much as possible."

8. Chasing points or miles. Credit card rewards can be addictive and cause some people to buy things they don't need simply to get the rewards. "The key to the rewards card is to use it to purchase things that you already need to buy," Harzog says. "If you need a new outfit, that's fine, but don't use a rewards card to buy a new outfit because you want the points." Plus, in order to receive a $500 plane ticket, you would need to charge several times that amount to earn the equivalent in miles or points.

Studies show that consumers spend more when paying with credit versus cash, and rewards card users spend even more than those with a regular card. "Rewards cards are designed to get you to spend more, and so they can be very enticing," Arnold says. "You've got to be very disciplined."