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3 Tips on Credit Card Debt Relief in Canada, 2021 Update

Credit Card Debt

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Manage your Credit Card Debt


One of the most common ways that people unwittingly fall into debt is through improper use of credit cards. 

Credit cards sound like a good deal, and many credit card companies make it easy to give in to the temptation to use them indiscriminately. While there’s nothing really wrong with racking up reward points or taking advantage of exclusive discounts it’s easy to get carried away.

Indiscriminate credit card use or splurging could end up with you having a home, full of things you don’t really need, and no idea how you are going to manage to pay for everything.  

If you’re struggling with credit card debt, you should look for debt relief, here are three tips for credit card debt relief in Canada.


1. Read the fine print on your credit card agreement


A credit card can be a great financial tool. It’s more secure than using cash and many credit cards offer rewards that make charging an expense worthwhile. Having a credit card and using it wisely is also an easy way to begin cultivating a good credit score.

The key to using your credit card wisely is to make sure that you know all the terms with your agreement with the credit card company. Not knowing about interest rates and late fees and penalties and their billing cycle are big factors in why people end up not being able to pay their credit card bill and getting into credit card debt.

If your credit card has a high interest rate, not meeting your credit card payments can have dire consequences. An unpaid monthly credit card payment incurs interest. That means that the bill increases for every month that it is unpaid.

For example, if in January, you didn’t pay your $200 credit card bill and your interest rate is 10% in February, the bill will be $210. That will continue to increase so your bill will get bigger and bigger until it is completely unmanageable. Add to that the fact that many cards have late fees, your unpaid credit card bill will just balloon the longer you put it off.

If you are struggling to pay off multiple credit card bills, it is especially important to know the credit card interest rates in order to prioritize the payment schedule.


2. You can and should talk to your credit card provider


Believe it or not, your credit card company takes no pleasure in seeing you struggle with debt. 

When you use your credit card, you are basically borrowing their money to pay for a good or service – and they want that money back. So they want you to make your monthly payments in a timely manner.

If you are struggling to make your monthly credit card bill payments, you can try to negotiate better payment terms with your credit card providers. 

If you were a good customer in the past, they could be willing to give you a lower interest rate on your payments.


3. Lower your monthly payment with by consolidating credit card debt


If you have multiple credit cards, and are having trouble making the monthly payments, this is a very good strategy to take.

When you consolidate debt, you basically arrange it so that instead of paying multiple monthly payments to different creditors, you make one monthly payment.

If we’re talking consolidating credit card debt, there are two ways that you can go about it in Canada.

  • Take out a debt consolidation loan. This is especially helpful if you have racked up debt on credit cards with high interest rates. Instead of struggling to make the increasing payments on your credit cards, you take out a debt consolidation loan to pay them. So, now you just need to meet the monthly payment to your loan. One payment, one interest rate. Bonus? Debt consolidation loans have a lower interest rate than many credit cards, so the monthly increase on one debt consolidation loan is much more manageable than it would be if you were paying multiple credit cards.
  • Enroll in a debt management plan. Talk with a credit counselor and develop a debt management plan that will help you devise a plan and a budget to ensure you meet your monthly credit card payments. Credit counselors can negotiate with credit card companies to lower your monthly payments – usually by lowering your interest rates. Having a debt management plan with a credit counseling agency also streamlines the payment process if you have multiple credit cards. You pay the agency a monthly payment and they pay your multiple bills for you.

Click here to see if you qualify for debt consolidation from anywhere in Canada.

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