Buying on credit is easy. It's convenient. It is also expensive. Before you buy anything on credit, consider your purchase carefully. Ask yourself if you really need the item you are about to purchase. If the answer is no, then don't buy it! Take your time when you're shopping. If you buy on impulse, you may end up with something you don't want or need.

There are several types of credit. Loans from banks, credit unions or trust companies are common. You can also get credit cards from credit companies, department stores and service companies such as gas stations. When you're buying a large item, like furniture or a car, the seller may offer you financing.

If you must use credit, use it wisely. Pay off your credit card balance each month to avoid paying interest. If you know you won't be able to pay off the balance all at once, look for a cheaper way to buy the item. Usually, it is cheaper to borrow money from a bank, credit union or trust company than it is to use the credit offered by the store. Banks, credit unions and trust companies have lower interest rates.

Interest rates can vary widely, so shop around for the best rates. Sometimes, lower monthly payments mean a longer term for your loan. That means you pay more in interest charges over the term of the loan.

You can cut down on the amount of credit you need by making a bigger down payment when buying large items. The less you have to borrow, the less you will have to pay in interest. So save as much as you can for the down payment.

Make sure you understand the full cost of credit. Interest rates and administrative charges are part of the cost of borrowing. If you are getting ready to sign a loan or accept delivery of a major purchase, read the contract carefully and note the cost of interest. Keep a copy of the contract in case you need it in the future.

Never charge anything just because you think your income is going to increase. What if your income doesn't increase, or you end up with expenses you hadn't expected?

There are two Acts that regulate credit in this province: the Consumer Protection Act and the Mortgage Brokers' and Lenders' Registration Act. These both require that a seller or lender disclose how much the credit will cost you. This must be done in writing, before you sign a contract.

Becoming an informed consumer is one of the best ways you can protect yourself. Don't be afraid to ask questions, and make sure you shop around, even for credit.