Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Credit cards can be both a blessing and a curse; it all depends on how you use them. On one hand, they’re great for making large purchases, creating a credit score for yourself and are even great for when you need a little extra help until your next paycheque. But it’s when you start to completely rely on them that they become a curse.
As with any financial instrument, credit cards serve a purpose, and when used responsibly, they pose no threat to your finances. If you’re short on cash, they can be an indispensable tool to help you access credit conveniently and quickly.
However, problems arise when you rely on credit cards to cover most of your purchases, especially over a short time period. It can be very tempting to pull out a credit card every time you lack the money to pay for something – and before you know it, you’ve racked up a mountain of debt and put a big dent in your credit score. You can quickly find yourself distressed and overwhelmed with making even the minimum payment on your outstanding balance.
Debt is present on the balance sheet of nearly every Canadian to some extent, but for some, the amount is excessive and can lead to financial instability.
A report from Equifax released in March of 2020 presents some enlightening data on Canadians’ average debt by age group. Use this chart to compare how severe your debt level is with the average person.
Age | Average Debt (Q4 2019) |
18-25 | $8,847 |
26-35 | $18,298 |
36-45 | $28,863 |
46-55 | $36,241 |
56-65 | $30,318 |
65+ | $16,491 |
Canada | $23,760 |
Want to compare credit scores? Check out the average credit score in Canada by age.
Here are some red flags that indicate you may have taken on too much credit card debt:
Do you have too much credit card debt? Are you addicted to your credit cards? Or are you unsure of how to answer that question? We’ve compiled the top reasons why you might have too much credit card debt.
Denial is a powerful resource for those with too much credit card debt. Do you find yourself constantly choosing to forget or ignore the fact that you have credit card debt especially when you go to charge something? Do you purposefully not open your credit card statements? Do you lie to the people in your life who care about you because you don’t want them to know about your credit card debt?
If you have answered yes to all or most of these questions then you’re probably in denial about your credit card debt and need to take control of it now.
While you are completely aware that you do in fact have a credit card and it probably has a pretty large balance on it, you never double-check it. You always pay the minimum so the total balance doesn’t really matter to you.
Saving money is not an option for you because you have none. Once you’ve paid for all your monthly bills and the minimum payments on your credit cards there is nothing left to save. This will of course only make your credit card debt worse as you will have nothing to fall back on in case of any kind of emergency, financial, medical or otherwise.
Learn more about how much of your income you should be saving.
Sometimes you have to work a second job or take overtime hours at your first job to help pay off your debts.
Using your credit cards until they are maxed out will only cause more problems in the future, there are lots of hidden fees and the interest that such a large amount of debt acquires will become a burden that you won’t be able to deal with.
Here’s what you can do if you’ve maxed out your credit cards.
If you are taking cash advances from one of your credit cards in order to pay off another that has a high balance. This is particularly troubling as it will be almost impossible for you to pay off any of your credit cards with this method.
You’ve tried to apply for a new credit card because your other ones are maxed out. The amount of debt you already have is way too high and you keep on getting rejected.
One of the most common ways you can let your credit card debt get out of control is to rely on minimum payments. Most credit cards require you to make a minimum payment each month on your outstanding balance. The minimum payment is usually a percentage of your balance, but it can also be a fixed amount.
Though it’s wise to pay off your credit card balance in full each month, many people opt to pay only the minimum amount. Because there are no immediate consequences for paying only the minimum, people are easily tempted to defer payment into the future. Some people only contribute the minimum payment because they lack money for various reasons or are preoccupied with paying for other expenses.
Check out these 8 ways on reducing your credit card debt.
Making only the minimum payment on your credit card balance can quickly lead to serious debt problems. The danger comes with compound interest. In the case of credit card debt, compound interest is the interest that is calculated based on the amount you borrowed plus the accumulated interest from previous periods. To put it another way, you’re being charged interest on any interest charges you don’t pay off.
Credit cards are notorious for their interest charges, which are compounded daily. The interest can be misleading as your credit card balance appears small and insignificant in the beginning. However, over time the outstanding balance grows exponentially until you find yourself unable to manage the payments.
If you struggle with credit card debt, try opting for a low-interest credit card.
There are a variety of ways to get yourself out of credit card debt. The ideal plan will depend on the severity of your situation.
While there are ways to overcome credit card debt problems, taking steps to avoid them in the first place is far more manageable. Here are some tips to reduce the risk of falling into a credit card debt trap:
If you’re currently struggling with excessive credit card debt and aren’t sure what your first step should be, Loans Canada can help. We can help you compare debt relief options and event match you with a service provider that meets your needs.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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