In my last post I discussed the dangers of paying only the minimum payment on credit card debt.  As promised, below I’ve listed some practical suggestions you can implement to avoid issues with credit card debt:

• Pay credit card balances in full every month to avoid interest charges.
• Make the payment prior to the deadline to avoid additional penalties or interest rate increases.
• One credit card is enough.  No one needs three, four, five credit cards.
• Avoid cash advances since there is no grace period - the interest starts accruing right from the day you obtain the advance.
• Use credit cards for convenience only, not everyday purchases.
• Switch to a lower interest credit card or line of credit and cancel/destroy the higher interest rate card.
• Take the card out of your wallet and stop using it until the balance is paid in full.  
• Try to look at the bigger picture and shed the instant gratification culture in which we live.  Ultimately any debt makes you vulnerable if you get sick, lose your job, separate, or experience other “life events” which is why it’s important to examine the type of items you are putting on a credit card and ask yourself if, in the long run, the purchase is worth risking your financial well being.  Save up for the purchase instead.  
• If you must carry a balance pay at least 3x the minimum payment required and make it your purpose to put every spare dollar on the card to pay it off.

In a perfect world we would all adhere to the above strategies but do you actually know anyone who lives in a perfect world?  Well, certainly you are not alone.  Canadians are at record levels of indebtedness and one in three Canadians are unable to pay their credit card balances in full each month.  Some households are simply overstretched and their credit card debt has become an unmanageable burden.  If you’re struggling with debt you may wish to contact us to discuss some of the options I will be writing about in my next blog that can eliminate credit card debt.

By:  Brenda D.  Owens, Trustee in Bankruptcy


Brenda works for James R. Yanch, Trustee in Bankruptcy
215 Simcoe St. N.
Oshawa, Ontario
L1G 4T1
905-721-7506
www.jamesryanch.com