Managing Credit Card Debt: Small Changes, Big Impact

It may not come as a surprise that credit card debt in Canada has reached unprecedented levels, with Canadians collectively owing over $100 billion on their credit cards. There’s a good chance you, or someone you know, is carrying credit card debt. No matter the amount, there are ways to manage and reduce credit card debt, helping you get back on track.

Create a Budget

As the economy recovers, many Canadians are spending more, often relying on credit for purchases.

Track your income and expenses to identify areas where you can cut back and allocate more funds toward debt repayment. Instead of grabbing a coffee on the go every day, try making it at home a few times a week. Small changes like this can add up over time.

Prioritize High-Interest Debt and Consider Debt Consolidation

High interest costs increase borrowing costs. This makes it more challenging to pay off credit card balances and can cause credit card balances to increase or snowball.

A sound strategy is to focus on paying off credit cards with the highest interest rates first to minimize the total interest paid. You may choose to pay off high-interest debt first, or explore consolidation options simultaneously.

Seek Professional Advice

Credit card debt can be scary, especially when the interest starts to compound. Not only can the debt negatively affect credit scores, making future borrowing more difficult and expensive, it can lead to significant stress and mental health challenges.

It's important to be proactive in managing credit card debt to ensure long-term financial health and stability.

If you’re struggling with figuring out how to get started, or where to direct your debt repayment, book an appointment with a Financial Services Advisor today! We’ll help you build a plan to manage debt effectively while working toward your financial goals. We’re here to help you Make Peace with Your Money.

Resource:
Silvestre, Irish Mae. “Canadian Expert Shares Realistic Tips to Help Pay down Credit Card Debt.”
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