There will be no interest rate increase this month, or in February 2019.

The Bank of Canada (BOC) announced on January 9, 2019 that the overnight interest rate would remain at 1.75% for the time being – at least until the next announcement, scheduled for March 6, 2019.

Reasons for the hold include the global trade economy (especially U.S.-China trade conflict); lower oil prices; and weaker-than-expected housing investment and consumer spending. Areas affected by oil production, like Alberta, may also struggle with consumer spending in the near future.

There’s good news, too. The Canadian economy is doing well, the BOC said, with unemployment at a near 40-year low. Inflation is on target as well.

And, of course, the hold is good news if you are carrying variable-rate debt.

With nearly two months to go until the next BOC announcement, now could be a good time to restructure debt. But what does that mean exactly?

If you are carrying $5,000 of debt on one credit card, $2,000 on another, and have a $10,000 line of credit, you might owe interest on all of those amounts. If interest rates increase again, because they have variable (non-fixed) interest rates, you’ll owe even more.

But if you take steps to restructure debt – move it around or combine it – you won’t owe as much interest. Plus, you may even be able to restructure in a way that moves your debt to a fixed interest rate, meaning it won’t change with the BOC overnight rate.

Options for debt restructuring include:

• Accessing home equity.
• Obtaining a debt consolidation loan.
• Entering into a debt relief program.
• Filing for a consumer proposal.
• Filing for bankruptcy.

Whichever route you choose, it’s best to act now, before interest rates rise again. The BOC has said more increases will likely be warranted in 2019, though they didn’t specify when. The best course of action is to get prepared now so when it does happen, you won’t have to worry.

DebtCare Canada can help. Contact us today for a free consultation to go over your debt restructuring options, find financial relief, and more.

Call 1-888-890-0888 or visit www.debtcare.ca.