Credit card debt is a significant problem facing many adults in North America, with Canada alone accumulating a whopping $5.85B in credit card liabilities (roughly $3,494 per head) just last year.
With squeezes on house-hold incomes continuing, despite some positive economic signals, customers are being forced to explore new ways in order to make savings.
Here are some of our top practical methods that can help you eliminate credit card debt as quickly and cheaply as possible.
Low Interest Credit Cards
From financing a new purchase to carrying out small balance transactions, low interest credit cards offer a far cheaper and savvier alternative that could help ease your financial concerns.
Compared to the astronomical rates charged on top of personal loans, lower interest cards offer far better value and they provide considerably more benefits than rewards cards that can sometimes be misleading.
Perhaps most appealingly, the cards are free to use annually at no charge and according to reviews, the RBC Cash Back MasterCard -which offers a rate of $1.99 for 10 months- is amongst the best low interest rate cards in Canada 2018.
Home Equity Loan
As the subtitle suggest, this method only applies to homeowners but if you need to urgently reduce your credit card debt then one of the cheapest options would be to use your property to a establish a line of credit.
If interest rates continue to stay low, you will have the added benefit of being in a position to exploit these historic rates meaning you can pay down the amount quicker.
A note of caution, however: a home equity line of credit is secured against your home; if you default then you will lose your property and you could incur higher fees if you pay late so always ensure payments are made on time.
You don’t ask, you don’t get? Right?
Maybe not always but it’s certainly important to keep an open dialogue with your bank if you’re facing difficulties. Contact your manager and let them know that you’re having trouble meeting your monthly credit card payments and ask them how they can help.
Remember that not everything is set in stone; you can negotiate on issues like late fees and interest rates and if you’ve been with the same bank for years and have a solid history of making payments on time then they should be helpful and considerate.
It’s in the bank’s best interest to ensure they receive their income; they would much rather reduce monthly repayment amounts then risk crippling you financially so you stop paying them back entirely.