Take control of your financial life
Credit cards are convenient and easy to use, but making regular payments to manage your credit is the key to avoiding debt and achieving financial freedom.
“If you are not able to pay your monthly credit card balance, opting for a low-rate credit card can be a way to manage your debt.”
Does having easy access to money sometimes make you feel like your wallet has no limits? If so, rest assured. You are not alone.
Credit cards and loans do make it tempting to borrow money to get the things you want. Although, being able to buy whatever, whenever, and wherever you want can lead you down a path of spending more than you actually earn.
That, unfortunately, means that you will start accumulating debt.
Make credit work for you
Credit cards will generally be your first access to credit, and they can offer a convenient way to pay for goods and services. However, these cards can be a very expensive way to borrow money if you don’t pay your balance in full every month.
If you are not able to pay your monthly credit card balance, you can manage your debt by opting for a low-rate credit card.
FCAC’s Credit Card Selector tool at itpaystoknow.gc.ca allows you to compare the features and costs of over 250 credit cards available across Canada and find the one that best meets your needs.
Our Agency’s Credit Card Payment Calculator can also show you how much more you can save over time if you make more than the required minimum payment on your card. You would be surprised to see how even a small increase in payments can make a big difference in the amount of interest you will pay and the time it will take to pay off the money you borrowed.
Set-up a debt reduction plan
Even if choosing the best credit card for your needs and using it wisely reduces your overall debt, reviewing your budget regularly is another “must-do” if you want to stay on the road to financial stability.
FCAC’s interactive Budget Calculator can help with that by showing you where you are putting money and where you can cut your spending. It lists your income sources and expenses and gives you a snapshot of your financial situation so you know where your money is going.
Establishing a budget will show you the types and amount of debt you have. This will in turn affect the strategy you will choose to try to pay it off.
You may choose to tackle your debt on your own or seek help by using a third-party such as a reputable credit counsellor. Provincial governments, non-profit organizations and for-profit companies all offer credit counselling services.No matter which strategy you choose, make sure your plan is achievable and realistic.
Getting out of debt is a personal journey. It is important to choose a strategy that meets your needs and fits your lifestyle.
If this stressful and unwanted financial situation affects you now or does in the future, tackle it promptly by mapping out a plan that will work for you.