The back to school
season, particularly for parents, is often a very hectic time of year,
especially with regard to finances. The need/desire for new school clothes,
shoes and supplies often leaves parents with racked up credit cards once all is
said and done - or rather, purchased. And often accompanying these credit card
bills is the challenge of finding money to pay them off.
Check out this
infographic from BMO to see just what these costs add up to:
So, what options are
available? Consolidating credit cards is a great way to reduce your debt
- and often makes sense – but the type of consolidation depends on your own
personal circumstances. Here are a few options that may be available to help
you deal with that back to school debt.
1. Home equity loan. By using the equity in your
home, you can consolidate credit cards, thereby reducing interest and
consolidating the various bills into one monthly payment. Of course, this is
only possible if you own a home and have sufficient equity for this purpose. If
you rent, or are without equity, this is probably not going to be a viable
option for you.
2. Consumer proposal. This is another great option,
especially if your credit isn’t great or if you don’t have the security or
equity for a loan. A consumer proposal will have some impacts on your credit in
the short term, but this is balanced out by the fact that interest stops
accumulating, there is, like a loan, just a single monthly payment, and in many
cases the overall debt owing is reduced.
3. Line of credit or loan from a lender. This is
another good option, and can achieve the same things as a home equity loan:
lower interest and one monthly payment. You will need to have good credit or
security for this option. At the same time, this is often the most expensive
option of all because it will involve higher interest than a home equity loan
or a consumer proposal.
Kids are expensive, and when back to school season rolls
around, they can become even more so. Once those bills start coming in, don’t
stress.
Call DebtCare Canada to find out about how to consolidate credit cards
and get rid of debt: 1-888-890-0888.
