Back to School Blues? Consolidate Credit Cards and Stop the Interest

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.

Summer Debt Relief: Tips to Reduce Your Debt

Over the summer many families find that debt rises with the temperatures; vacations, weekends away, daily outings, etc. can all leave the wallet feeling very light. If you entered the summer drowning in debt, the worst thing that you can do over the summer is add to that. Instead, use this time to make some financial changes and reduce you debt rather than continuing to build it up. Here are our summer debt relief tips to help you regain control of your finances.

Debt relief tip #1: Go over your finances and set a budget. Look at how much you spend every month on bills and see where you can save. And be realistic. Don’t deny yourself every luxury – you won’t be able to stick to it. For example, if you eat out 5 nights a week, don’t cut this out altogether, you are bound to cave in at some point. Instead try and limit these treats to once a week, or even once every 2 weeks.

Debt relief tip #2: Avoid making only minimum monthly payments. Most of your monthly payment is just interest, very little of the principle balance being paid off as a result. Check out your monthly statement – most will give you a timeline showing when your balance will be paid off if only monthly payments are made – this might shock you – and hopefully motivate you to reduce your debt!

Debt relief tip #3: Contact your creditors and see if they can offer a lower interest rate, especially if you have received offers from other companies offering an interest free period and free transfer (just be sure that you can pay off the balance before the interest free period is up). This option though is often only good for those with good credit – if your credit is less than stellar or if you routinely miss payments, there isn’t much motivation for your creditors to reward you with a lower interest rate.

Debt relief tip #4: Seek the help of a professional. Once you get deep into debt, it can seem impossible to climb back out. But it is possible. If you have tried to reduce your debt but just can’t seem to make any progress, it might be time to call in the professionals, ones with experience helping Canadians get debt relief. Debt consolidation, consumer proposals or bankruptcy are all viable options to reduce your debt, and can all end up significantly reducing the amount of debt you currently carry.

Don’t let summer spending get away from you. Instead, try to reduce your debt instead of increasing it with these tips and others. For more tips about debt relief and how to reduce your debt over the summer, please contact DebtCare by calling 1-800-890-0888 or visiting www.debtcare.ca.

The Globe and Mail Reports on Canadian Consumer Debt

The Globe and Mail recently reported on the status of Canadian consumer debt levels, stating that Canadian household debt continues to grow. With that said, individuals seem to be obtaining less credit and the Bank of Canada reports being less concerned about this debt than in years past. 

However, a report from Statistics Canada calculated the average household debt at $164.97 for every $100 of disposable income, slightly higher than the analysis from 3 months previous. And just because the head bank doesn’t seem too concerned, it does not mean that Canadian consumer debt levels are not at a record high – they are.

It has become quite common over the past several years to hear these reports about Canadian consumer debt levels no matter where you go. If you are not in debt often these updates seem irrelevant and are easily pushed aside. However, if you are in debt these updates can often leave you stressed about your own financial situation.

If you find yourself getting shaky or stressed out with each report like this one, it might be time to recognize that you need some help with reducing your debt. Instead of trying to ignore the signs that your debt is becoming unmanageable or hoping that if ignored the problem might go away (it won’t), why not consider working with a professional to get rid of your debt.

How can a professional debt consultant help? After an initial consultation which will involve assessing your debt, your re-payment behaviours, and your monthly income, a debt consultant will be able to discuss with you the various options which exist to help you get out of debt. They can also help you to establish a budget that is realistic while at the same time focusing heavily on repaying the money that you owe to your creditors.

Some options which may exist include debt consolidation, consumer proposal or making settlements with your creditors. All three of these solutions come with their own benefits and it pays to consult with a professional to best determine which option is the right one for you. Some might even offer the ability to settle what you owe with creditors at a much lower amount – saving you money.

If you find yourself constantly trying to avoid the reports on rising Canadian consumer debt levels, change your perspective and start looking at it as a motivator to get your own debt under control.

For more information about how you can reduce your debt, please contact the professionals at DebtCare Canada by calling 1-800-890-0888, or visit us online at www.debtcare.ca.

How to Check Your Credit Score?

In Canada, a credit report and credit score is used by many different institutions, including banks, credit agencies, and even employers. These documents contain important information about your borrowing and repayment habits, and provide a detailed account of your past financial history. Even though these reports are so important, many Canadians are not familiar with the process of requesting and understanding the credit score.

Understanding your credit score is important for a number of reasons. One of the most important is because, whenever you apply for credit, be it a mortgage, automotive financing, or a credit card, your credit report is pulled by the lending institution and assessed. In order to qualify, you must meet certain qualifications with regard to the report, and so knowing where you stand is crucial.

What if your credit score is less than stellar? Too much credit, being too close to your limits or too many late or missed payments can severely reduce your credit score. In order to bring the score up, it might be prudent to speak with a financial debt consultant to discuss some options to reduce your debt and regain those lost credit points. Debt consolidation or consumer proposals are great options to help you get rid of your debt.

So, do you know how to check your credit score and credit report? Here is some important information that will help.

Requesting your credit score is actually quite simple. There are a few different credit reporting agencies in Canada, but the most popular are TransUnion and Equifax. Both of these agencies provide online copies of your credit report and credit score for a fee - simply visit the website, enter in some identity confirming information, and you will be able to print your credit report and credit score.

Another reason that it is important to understand how to check your credit score and credit report is to make sure that everything it contains is accurate. Credit reporting agencies can make mistakes when compiling the information, and if something is reported incorrectly this can harm your overall credit. It is important to check your report regularly in order to find any mistakes and remedy them. That being said, when a mistake is brought to the attention of a credit reporting agency you may find yourself frustrated by the amount of back and forth that takes place. If you find yourself having a hard time dealing with those credit reporting agencies and their unwillingness to accept responsibility or fix the incorrect data, contact a financial consultant who can help get the issue resolved.

If you want more information about how to check your credit score and how to understand your credit report, please contact DebtCare Canada by calling 888-890-0888 or visit www.debtcare.ca.