How to Reduce Credit Card Debt
Nov 03, 2024
Every time you borrow money, you're robbing your future self.”
β Nathan W. Morris
According to credit reporting agency Transunion, the average credit card balance of Canadians at the end of 2023 was $4,265. It was $7,236 for Americans.
β Use your credit card sparingly—only for booking flights and hotels.
β Make a plan to pay off the balance on your credit card by trimming your budget. Reduce spending where you can.
β Your credit card is a form of revolving debt, which makes it hard to pay off. Keep only one card and cancel the others.
β As much as possible, prepare home-cooked meals instead of eating out.
β If your credit is clean, consider transferring the balance on your credit card to one that offers a lower interest rate. Don’t be tempted to accumulate debt again.
β If you have substantial revolving debt, consider obtaining a consolidation loan. These loans have a fixed payment amount and a specific repayment period.
β Negotiate a lower interest rate on your credit card with your bank.
β If you find it challenging to pay off your credit card due to extenuating circumstances, such as job loss or illness, seek credit counselling.
Keeping a balance on your credit card drains your finances. Missing payments can also impact your credit score, and in a rising interest rate environment, this situation can only worsen.
