In fact, after the latest rate has ascended in Canada, it’s essential now to pay down your debts with the cost of borrowing. This statement from the Bank of Canada must make Canadian people concerned.
Needless to say, a lot of credit cards have such high-interest rates that they lead to the scariest debt in the whole world. Scott Hannah, the president of Credit Counselling Society, recommends paying off your debts on the credit card as soon as possible despite the fact that prime rates don’t influence the credit ones. In his opinion, this is a huge problem when people tend to have a balance on their credit cards.
The statistics from the MNP proves that 44% of Canadians are close to financial problems and instability.
It is highlighted by the credit company TransUnion that average debt is approximately $30,000 per person with an ordinary credit card budget of $5,000. Also, as a matter of fact, 50% of Canadians try to pay off their debt every month and it’s much harder for those who don’t have an opportunity.
In addition, sociologists from Vancouver have conducted a survey about how people in Canada pay down their debts. The results stated that 11% of Canadians use payday loans Canada, 18% of the population can’t pay off their debt in time. 24% of people don’t have an opportunity to pay their utility account and 25% must borrow money to buy essential things, such as food.
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However, some people are willing not to mess with debt or get rid of it as soon as possible, so Scott Hannah recommends putting together a budget, which will be great for spending money on needs. Moreover, he thinks that you should really keep up with your plan if you want to be free of debt. For instance, save some money on unexpected situations, such as car repairing, and use savings instead of your credit card. This will help you not to get into this cycle over and over again.Also, Scott Hannah reminds to come up with a working strategy as for paying off debt. Try to get out of small debt first, because you will get motivated to cope with the bigger one if you have.
A lot of people get consolidation loans to pay off another debt they have, but it’s advised to stick with tracking record in priority and then get a consolidation loan. “It will take a while, but it’s definitely worth it, because some emergencies may happen”, says Scott Hannah
What is more, the payment plan and established budget are useful, in the specialist’s opinion, while getting a consolidated loan when you have set the base.
In addition, Hannah says: “When you transfer money from one credit card to a low-interest one, it can reduce your payments, but don’t forget that it takes a balance transfer charge. So, it’s better not to do this trick until you deal with debt.”
When you stick to a budget, you will see an improvement of your financial state and progress in your life, in general. Everyone has drawbacks in life, but if you control every piece you will manage to overcome them. Be smart, prudent and you will never face debt in your future.
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