According to the Canadian Bankers Association, 40% of Canadians do not fully pay their credit card balances each month. When you consider that credit cards are among the most expensive debts, there is a reason to worry.
Are you in need of credit card debt settlement? We’ve got good news – can help
Of all traditional payment methods, credit card payments are the fastest-growing of all. The Canadian Payments Association has reported the growth of over 7% per year since 2008.
It is easy to understand the popularity of credit cards: they are accepted almost everywhere, the transaction is done in a few seconds, no need to find a bank machine, fraud protection is offered and most even offer rewards.
However, credit cards also come with caveats: the interest rate is often very high, which quickly drives up the balance if it is not paid in full. In fact, the credit card is probably the best tool available to get into debt!
If you are caught with a credit card debt, do not despair, it possible to have a plan to repay it. At https://dedebt.com/debt-settlement/credit-card-debt-settlement/ there are tips that should help you settle your credit card debts faster.
Concentrate on your debts (to the detriment of savings)
Before putting savings aside, prioritize the repayment of your debts. The “return on investment” is much better when you repay your high-interest rate debt than when you put that same money. For example, a $ 1,000 debt at 20% interest costs $ 200 a year while investment will pay around 5% per year, or $ 50. The choice is clear.
Review your budget
When was your last family budget? Take the time to review your income, but especially all your expenses in detail to determine where you can cut. Start with obvious expenses such as restaurants, cell phones, outings, clothing, alcohol, and tobacco. If you can not cut these expenses further, consider reducing your car payment or housing if possible.
Prioritize the repayment of cards with the highest interest rates
When you have money available to repay your debts, start by paying off the most expensive credit card, the one with the highest interest rate. Once this card has been paid in full, you can move on to the next, not before. Be wary of the temptation to pay the credit card with the smallest balance: it would not be the optimal strategy.
Make a balance transfer
You have probably already received mailed promotional offers from credit card companies that encourage you to transfer the balance of your cards at home. These promotions usually allow you to get a 0% interest rate for several months.
If you opt for a balance transfer, there is however a very important warning to understand: most of these promotional offers mention (in very fine print) that following the promotional period, if the balance has not been paid in full, interest will apply retroactively from the date of transfer. This means that if you have one dollar left, a mountain of interest will be added to your balance. So make sure you understand all the details of the offer.
Make more than the minimum payment required
If you just make the minimum payment required, you will be struggling with your debt for years, if not more than a lifetime! During this time, you will have paid a real fortune in accumulated interest. If possible, cut into some personal expenses like restaurants and cafes for a period of time so you can pay back faster.
Ask for a lower interest rate
If you call your credit card issuer and request a lower interest rate, it may be accepted. The competition between credit cards is very strong and it is more interesting for the issuer to lower its rate than to lose you as a customer.
Consolidate your debts
By consolidating your debts, you reduce your overall interest rate, which allows you to repay your debt faster. Debt consolidation is a personal loan from a bank to pay off all your debts. Once consolidation is in place, you only have one monthly payment to make.
If you opt for this solution, make sure the new loan is a personal loan and not a line of credit. This is important because the line of credit will take you into debt even more. The personal loan will require you to make monthly payments regularly and for a fixed period (usually 3 to 10 years).
Do not use your credit cards anymore
You are currently working very hard to pay off your credit cards. So avoid using them completely. That would be counterproductive, would not it?
Speed up your payments
Why wait to receive your monthly statement to pay your credit card. Try this: as soon as you have $ 50 free, apply it on your balance. When you have money in your bank account, you are often tempted to spend it. Avoid this happening!
Ask about the consumer proposal
If, despite all this advice, you are not able to repay your credit card debt in a reasonable time (not 15 years!), Know that the consumer proposal could be the best solution for you.
A consumer proposal is an offer made to all your creditors submitting a partial refund of your debts over a period of up to 60 months. The refunded portion generally represents 30 to 70% of the original amount. This solution is particularly interesting because it freezes interest and consolidates all your debts into one monthly payment that respects your budget.