debtcare.ca

Category: Credit Card Debt

  • Get Debt Help Without Leaving the House – Here’s How

    In the past, before the novel coronavirus (COVID-19) people might have gone to see a financial consultant in person for debt help or otherwise, but with social distancing in effect, that is not advised right now unless absolutely essential.

    However, debt help is more necessary than ever right now. The impact of COVID-19 has left many Canadians out of work and struggling to pay bills.

    A report from the Canadian Centre for Policy Alternatives warns the unemployment rate could rise to 13.5%, the highest level since the Second World War.

    In one week, more than 500,000 Canadians applied for employment insurance (EI). The government is also expecting more than 4 million applicants for the recently announced Canada Emergency Response Benefit (CERB).

    While some government help is available — such as emergency caregiver assistance and a wage subsidy for eligible employers — these programs are still rolling out and there may be a waiting period to receive funds. And for many, the assistance provided may not be enough to get by.

    Dealing with Debt to Free Up Finances

    Debt payments take up a large chunk of Canadian budgets. According to Equifax Canada, the average Canadian carries $72,950 in debt. $23,800 of that is non-mortgage debt (which includes credit cards, loans and lines of credit).

    Even carrying a little bit of debt can stretch your budget, especially when your income is reduced. Do you want to be putting your limited income towards credit card payments?

    When every penny counts, it’s better to make that money work for you — instead of using it to repay past expenses.

    The time to deal with debt is now, particularly if you have been laid off or your income has been affected by COVID-19 or otherwise.

    While everyone is frightened and worried (and rightfully so), the current situation and loss of income will allow people to get much lower deals on their debts as their income has been reduced. Most creditors will be accepting any reasonable offer.

    If you wait until your income has returned, the opportunity to have your debt reduced to the same extent will be gone.

    How to Get Debt Help Online

    The key to getting debt help online — without leaving your house — is knowing what you are looking for.

    You want to find:

    • A debt consultant that has an established reputation (meaning you can trust their services — this is especially important when you cannot visit their offices due to social distancing).
    • A debt consultant that works in your part of the country or nationally.
    • A debt consultant set up for remote access — with social distancing, you shouldn’t have to go into an office.
    • A debt consultant that will review all your options.

    We can only speak to our services at DebtCare Canada, but we provide exactly that. We’ve helped thousands of Canadians deal with their debt and get their finances back on track.

    We act solely in your interest to ensure that you get the best possible results by utilizing federal government programs and other financial solutions to help you deal with your debt with dignity.

    Our reputation is trusted and secure. We operate nationally and remain fully functional during the COVID-19 pandemic through remote operations.

    How to Contact DebtCare Canada Remotely:

    We know this is a stressful time and we want to assure you that DebtCare is here for you. If you are struggling, please reach out. 

    You can also follow us for regular information related to dealing with your finances during COVID-19 and beyond. DebtCare is on Twitter, Facebook, and LinkedIn.

    Learn more about our services at https://debtcare.ca/.

  • Bank of Canada Prime Interest Rate Staying the Same for September 2018

    The Bank of Canada prime interest rate is remaining at 1.5% for September 2018.

    On September 5, 2018, the Bank of Canada (BOC) announced its decision to keep rates the same, referencing high gas prices, uncertain trade policies, and a stabilizing housing market.

    Canadian interest rates have increased four times since July of 2017, going from 0.5% to 1.5%. The last hike came in July of 2018.

    Interest rates affect all forms of non-fixed (variable) debt. This might include unpaid bills, lines of credit, variable-rate mortgages, and, of course, credit card debt.

    Credit card interest rates already tend to be very high — much higher than many loans. Added BOC interest rate increases would only bring that amount up more.

    Equifax Canada estimates that Canadians carry $599 billion worth of non-mortgage consumer debt, including credit cards, auto loans, and the like. They predict that the amount of delinquencies — people who can’t or don’t pay their debts on time each month — will increase by the end of 2018.

    Part of that prediction is based on a decline in the number of people who completely pay off their credit card bills each month. Even if you make the minimum payment every month, you will still be charged interest on the remaining balance.

    The September rate hold can give Canadians a chance to deal with outstanding debts — particularly credit card debt interest.

    Consider the following options for managing credit card debts, or other consumer loans, that you can’t pay off in full:

    • Seek a consolidation loan with a fixed-interest rate.
    • Don’t open up any more credit cards if you can’t pay the balances on existing ones.
    • If you have home equity available, consider using it to pay off outstanding debts.
    • Consider filing for a consumer proposal or filing for bankruptcy.

    At DebtCare, we can help you break free from your debt. We will assess your financial situation and make a plan to manage it before the next Bank of Canada prime interest rate increase.

    There is another BOC announcement scheduled for October 24, 2018. Many economists are predicting rates will increase again at that time.

    Don’t wait — get in touch with us before October 24.

    Call 1-888-890-0888 or visit www.debtcare.ca for a free consultation.

  • Step into Spring with a Smile: Realistic Ways to Get Rid of Credit Card Debt

    credit card debtIs your credit card debt making it hard to get to sleep at night? Are you finding it hard to focus on daily tasks because of the stress? Are collection agencies calling you or your family members in an attempt to obtain what you owe? Are you avoiding opening bills that you know you can’t pay?

    If you answered yes to any of these questions, don’t worry, you are not alone. Thousands of Canadians struggle with this financial problem on a regular basis. The ease with which credit companies extend credit and the high interest rates have made credit card debt a national problem, one that continues to plague the average Canadian no matter their income or financial status.

    Does this mean that you have to continue to struggle to make those monthly payments or combat the stress? No – there are ways to get rid of credit card debt and stop the calls and finally get a good night’s sleep.

    • Firstly, stop using those cards. Right now! Remove the cards from your wallet to help resist the temptation.
    • Secondly, assess your debt. Make a list of the credit cards, the amounts you owe, and the monthly payments. Follow this up with a monthly budget, including everything you spend money on and all income. Once you’ve done this, establish what expenditures can be cut – and cut them.
    • Attack your debt. Once you’ve cut your spending, start applying that extra income to your current debt load. Make sure that you are making at least the monthly minimum payment on each card, and apply any additional savings to the balances owed.

    If this doesn’t seem like a realistic approach for the amount of debt you are currently carrying, or if making minimum payments has become almost impossible, some more serious methods may need to be considered. If this is your current situation, our best advice is to speak with an experienced debt specialist right away. Getting rid of your credit card debt might mean a debt consolidation, consumer proposal or bankruptcy – all of which are complex and come with a number of great benefits.

    Stop ignoring those phone calls and throwing away those bills. Deal with your credit card debt and eliminate that stress.

    For more about getting rid of credit card debt that seems to be holding you back please call DebtCare Canada today at 1-888-890-0888.

  • Getting Back in The Black: Credit Card Debt

    Credit Card DebtCredit card debt – the giant elephant in the room that sometimes you don’t even want to acknowledge, let alone discuss with anyone else. We all know that sometimes it gets to the point that ignoring this monetary mountain seems like the only way to preserve your sanity – but if you’ve reached this point we urge you to reconsider! In this case, the phrase ignorance is bliss could never be more incorrect!!

    Here are some realistic credit card debt solutions that can help you get a handle on these financial obligations:

    • Pay the minimum monthly payment at the very least. Never ignore a credit card statement – this will quickly destroy your credit. If you can, pay a bit more than your minimum payment on each card. Since monthly minimum payments are mostly interest, paying just a bit more each month means you are actually paying off the balance.
    • Pay the card with the highest interest first. With interest rates as high as 29%, your monthly payments on credit cards are going to be almost all interest – meaning very little is actually being achieved as far as paying these cards off. A popular method for getting rid of credit card debt is to start with the card with the highest interest rate and pay as much as your budget will allow on top of the minimum payment, while still maintaining the minimum payments on your other cards. Once that card if paid off, start on the card with the next highest interest rate.

    Sure, these two suggestions are both great if possible – but if you can’t pay even the minimum, it might be time to think about some other options.

    • Apply for a debt consolidation loan. One of the reasons that credit card debt is so problematic is because of its high interest. If you have more than one credit card company hounding you for payments on a regular basis, why not consolidate all of those debts into one with a consolidation loan with a lower interest rate. Not only does this option reduce the amount that you are required to pay (meaning more is applied to the amount owing rather than just empty interest payments), it also keeps it contained with one convenient monthly payment.

    Can’t get a handle on your credit card debt and feel as though you are suffocating? Don’t let it become insurmountable. Get in touch with a debt solutions organization with the knowledge and expertise that can help you get a grip on this all too common financial problem.

    For more about strategies for dealing with credit card debt please call DebtCare Canada today at 1-888-890-0888.

  • Say Goodbye to Credit Card Debt

    Credit Card DebtWith Canada’s consumer debt continuing to rise, although at a slower rate, it is no surprise when individuals come to us looking for credit card debt relief. The ease with which credit card companies extend credit, even to those with less than stellar credit, and with credit limits far exceeding what is necessary, it can be really easy to get in over your head relatively quickly. And with all of that spending, at month’s end, or a few months down the road, you might find yourself in the common position of wondering how you are ever going to pay down those debts!

    Because they carry such high interest rates, and because the balance is revolving (meaning once you have paid off a portion, that credit becomes available again), credit cards are often the most difficult types of debt to pay off. But there is always hope. Start by paying more than the minimum payment each month, as much as you can. The minimum payment is typically little more than interest, and therefore not much is actually going onto the principal.

    Don’t have enough extra each month to pay that much more than the minimum on more than one card? One of the best ways to deal with this situation is to start with the card with the highest interest rate and pay as much as possible. Since this card is costing you the most, work harder at paying it off. Once it is paid off, move to the one with the next highest rate.

    So how can you cut down that monthly spending in order to find the cash to add to each month’s payment and cut down your credit card debt? What about taking advantage of these useful, but all too often ignored, money saving strategies:

    –        Have a yard sale – you have all of that stuff lying around anyways – why not get rid of it and make some money in the process.

    –        Save your change – when you empty your pockets, instead of using that money tomorrow, put it in a jar and save it up – you might be surprised how fast it actually grows.

    –        Make your own lunch and brew your own coffee – sure, this might mean a bit of extra time and effort, but just think about the fact that that $2 a day coffee habit is actually costing you $40 a month!

    –        Coupon clip – check the flyers, look online, and search for deals in store. Again, this might take a bit of extra time but the savings in your pocket can actually be well worth it!

    –        Visit the library – don’t think that the theatre or overpriced bookstore are your only options for entertainment. Your local library probably has a great selection that is largely underused – and free!!

    –        Plan your meals and groceries in advance – buying everything at once lets you take advantage of bulk buys, and can mean useful ways to stretch the budget and the food.

    Credit card debt can be a nightmare to deal with, but with the right support and guidance it is possible to pay it off. DebtCare can help. Call us today at 1-888-890-0888.

  • March Break Madness – Don’t Rack Up That Credit Card Debt

    Credit Card DebtHey parents: March Break is right around the corner, and for many Canadians with kids this can mean a week filled with activity and outings. And these outings can often become huge expenditures. When you are already in credit card debt up to your eyeballs, these costs are all that much more troublesome. This year, skip the costly jaunts and daytrips and opt for something a little less expensive.

    Simple Saving Tip #1: Get crafty at home. If you are creative, this can be a great way to not only save a buck but also to get in some much needed family time. Check out websites for crafty ideas to keep the kids occupied (ones that involve things around the house rather than things your need to go out and buy).

    Simple Saving Tip #2: Check out free community events. Many communities plan and organize events for school-aged kids over the March break, so why not take advantage of them. Better yet, get together with a few other parents and organize a pick up and drop off schedule so that one parent doesn’t have to do everything and the kids can participate in a group. Libraries and arenas are often a safe bet.

    Simple Saving Tip #3: Skip the trip down south and opt for a day at an indoor waterpark. Pack up the kids and their swimsuits and head to the ‘beach.’ Even more savings can be had if you bring a picnic lunch, rather than shelling out major dough on fast food. Sure, you’ll be basking in the glow of artificial sunlight, but your wallet and the credit cards inside will thank you!

    Simple Saving Tip #4: Plan a movie or game day. Sure, vegging out on the couch may not be something you want to drill into your children’s heads, but the odd movie date never really hurt anyone. Pop your own popcorn or bake some cookies together for snacks and sit down on the couch to enjoy a flick. Or grab those dusty board games from the top shelf and get a little healthy competition flowing.

    Simple Saving Tip #5: Get some fresh air. Check out local hills and grab a toboggan for some fun in the snow. Take the family dog for a long hike through the forest. Take out the skates and head to the local outdoor rink. Bonus: exercise will make you feel better too!

    Just because it is March Break doesn’t mean you need to rack up that credit card debt. Use these simple money saving methods to keep kids entertained without breaking the bank.

    For more information about credit card debt, how to stop it from accumulating or how to deal with it, please contact DebtCare Canada today by calling 1 (888) 890-0888.

  • What Does A Trustee Do?

    If you have financial problems and have thought about consulting a trustee in bankruptcy, you may be curious about the role that they play in helping you deal with your financial problems, and may be asking yourself “what does a trustee do anyway?”

    The first thing to know is that a trustee in bankruptcy does not represent you. You may have seen advertisements by trustees that make it seem as though they want to help you. What does a trustee do? Well, they are a court appointed officer that administers bankruptcies and consumer proposals. They have an obligation to act in the best interest of both you and your creditors.

    Let’s look at a bankruptcy as an example. When you visit a trustee to file for bankruptcy they review all of your household income, debt and other financial details and then advise you on what your monthly payment in bankruptcy will be. You make your monthly payment to the trustee in bankruptcy each month. If you have assets or surplus income for example, what does the trustee do? They will ensure that they collect equity in those assets or surplus income for the benefit of your creditors. They are not there to protect your income and assets, they are simply administrators of the bankruptcy process. If they can collect more money through your estate for your creditors, they will.

    Consumer proposals are also administered by trustees in bankruptcy. When you visit a bankruptcy trustee directly to discuss a consumer proposal, they will assess your income, debt, assets and other personal household and financial information. What does a trustee do next? They will suggest an amount of a consumer proposal that they believe will be accepted by your creditors. This does not always result in the best deal for you, and if you visit a trustee directly you will have little to no negotiating power because they are simply administering your consumer proposal, so what they present to you is what they will be prepared to go forward with. They are not there to get you the best deal.

    Do you do your taxes without the help of an accountant? Not likely. If you were charged with a crime would you defend yourself without a lawyer? Probably not. Dealing with a trustee in bankruptcy is no different; you should not do so unrepresented.

    Having independent financial representation when considering a consumer proposal or bankruptcy is crucial because it enables you to have your personal and financial information reviewed by a professional who represents and is hired by you and who understands bankruptcies and consumer proposals. They can vet your personal and financial information, identify any issues before a trustee is made aware of them, and help you come up with a proposal to present to the trustee that you can live with.

    Do not answer the question “what does a trustee do” the hard way. Filing a bankruptcy or consumer proposal is an official process. Once you have committed to either one of these processes there is no turning back, so it is important to do everything in your power to ensure that you enter into the process with all of the necessary information. The more informed you are, the better financial arrangements you will be able to make, which will save you thousands.

    If you have more questions about this article “What does a trustee do?” or if you need representation in a consumer proposal or a bankruptcy please visit www.debtcare.ca or call 416-907-2582.

  • How to Rebuild Your Credit Blog Series – Part 4 Having Too Many Credit Products and Too Much Debt

    This is the fourth blog in a 4 part blog series about how to rebuild your credit. When you accumulate too much debt or have too many credit products, this can harm your credit. Credit card companies are aggressive, using marketing points programs, promotion and incentives to entice consumers to take out a credit card. Over time, it is not difficult to find yourself with several different credit cards with balances that are accumulating interest.

    If you want to know how to rebuild credit and you have several credit cards, your first step will be to close some of them. Some financial advisors will tell you that closing credit cards will actually harm your credit, when in fact in the long run getting rid of credit cards will increase your credit score. Having one or two credit cards is sufficient to have good credit so if you have more than that, closing some of them is a good idea. How you go about closing credit cards is the key.

    Firstly, closing all of your credit cards is not a great idea unless it is part of an overall plan to settle out your debt, and then taking out a single card to rebuild your credit. Simply closing down all of your credit cards without a plan to have a credit item to rebuild credit will reduce your credit score. If you have accumulated a lot of credit card debt and are working with a company to get rid of your debt with a plan to rebuild, then naturally it will involve wiping the slate clean (clearing and closing all credit card debt) and then starting fresh. In the absence of a financial plan to rebuild, closing all of your credit cards may reduce your credit score because you will not have credit reporting to your credit report. This is necessary to build your credit score because it shows new potential creditors, mortgage providers for example, how you pay your monthly obligations.

    Also, do not close out credit cards that have balances. If there are balances on credit cards you should first deal with the balances either by paying them off, settling them, or including them in a financial program to get out of debt. Once the balances are cleared, you can go ahead and close out the card. If you close cards when you have balances the result will be a credit card that has a balance and a zero credit limit and this will have the same negative impact on your credit report as if you have a credit card that is maxed out (see part three “Credit Balances That Are At, Close to or Over” in our four part blog series How to Rebuild your Credit).

    Additionally, if you plan to close out your credit cards make sure you write to the credit card provider clearly indicating that it is you who wants to close out the credit card balance. When a creditor closes your credit card they can report one of two things to the credit bureau: “credit limit closed by consumer” or “credit limit closed by credit grantor” – you do not want the latter reported on your credit report. Sending a letter will enable you to prove to Equifax that you in fact closed the card in the event that the credit does not report who closed the card accurately.

    This may all seem like good advice, but if you are drowning in credit card debt, closing credit cards right now is not really an option without a financial plan. Learning how to rebuild your credit takes time, as does dealing with accumulated credit card debt. There are fast and effective methods to deal with debt and start rebuilding your credit, but in most cases they will involve the assistance of a financial professional who can guide you out of your debt with a plan.

    If you would like more information about how to rebuild your credit or if you are in debt and need some guidance, please call DebtCare at 416-907-2582 or visit www.debtcare.ca.

  • How to Rebuild Your Credit Blog Series – Part 3 Credit Balances That Are At, Close to, or Over

    This is the third part in a four part blog series about how to rebuild your credit. Learning how to rebuild your credit begins with learning how to manage it. One major impact to your credit score is when you have credit card products that are close to, at, or over their limits.

    Many people think that the best way to build credit is to get a credit card, use it, and then make monthly payments. This is a dangerous proposition. How you manage each credit card will impact your credit score either by either increasing or decreasing it.

    Learning how to rebuild your credit means understanding how your credit habits can result in a decrease to your credit score. As a rule of thumb you should try to ensure that your credit card balance does not exceed 75% of your limit. If it does, it will not only reduce your credit score but will also trigger a message on your credit report that says “proportion of balances to credit limits are too high”. Even if you have 10 credit cards and only one of them is close to, at, or over the limit, it will negatively impact your credit score and trigger the above mentioned message on your credit report.

    If you have had bad credit in the past and are trying to figure out how to rebuild your credit you may see a secured credit card as one option, and financial professionals will often suggest this as a way to rebuild credit. When you take out a secured credit card, you will send the credit card company a deposit and then they send you a credit card with a limit equal to or less than the deposit you sent them. When you do this, that credit card has the potential to rebuild your credit. Re-loadable credit cards are not secured credit cards and do not rebuild your credit.

    When trying to rebuild your credit, if you take out a secured credit card it is likely that your secured credit card will have a smaller limit, usually $200, $500 or $1000. We discussed the issue of how much of an impact it can have to your credit if you have a balance on even one credit card that is close to, at, or over your credit limit. This is one of the most common mistakes people make when they take out a secured credit card. Capital One is a company that offers secured credit cards and often a first time secured credit card with Capital One will have a low starting limit of a couple hundred dollars. Even if the limit on your secured credit card is only $200, do not carry more than 75% of your limit as a balance. For example, if your secured credit card has a limit of $200, do not run a balance higher than $150.

    In other situations, when people begin nearing or going over their credit limits on credit cards, it is a sign of a deeper financial problem. It is very easy to get in over your head with credit cards. You may have a few credit cards and one month you may use one to make an expensive car repair, and then another month you may use another when you go on vacation, and then another month you may use another one to make repairs in your home. Before you know it you can have several credit cards with high balances and when interest begins to accrue they can become very difficult to pay off. Minimum payments barely cover interest and if you get caught in a cycle of only being able to afford the minimum payments it can take many, many, years to pay them off.

    If you want to know how to rebuild your credit and you have credit card debt and are only making minimum payments right now, it may be time to make some choices that will enable you to rebuild your credit. Sometimes it’s hard to know which choices are the right ones when it comes to dealing with your debt. There are many resources available to people who struggle with debt. Once you have dealt with your debt and are beginning the process of rebuilding credit, your best option when using a new credit card that is meant to rebuild credit is to use the card for limited expenses, such as gas, and only use as much as you can afford to pay off in full in a given month.

    If you would like more information about how to rebuild your credit, or if you are in debt and need some guidance, please call DebtCare at 416-907-2582 or visit www.debtcare.ca.

  • How to Make a Credit Card Debt Settlement

    When credit card debt begins to build up it can become very difficult to pay off. Credit cards bear monthly compound interest so if you get into a routine of making minimum monthly payments, the interest can sometimes be as much as the payment that you make. The end result is that you make a minimum payment and then once the interest is applied to the balance, you end up owing the same amount as you did before the payment.

    If you start missing payments the balance increases and late fees may also be added to the balance, making the debt grow even larger. This can start a vicious cycle that can result in the credit card debt going to collections and destruction of your credit.

    There is no magic bullet for dealing with credit card debt. Your options are really to come up with the money to pay it off, borrow the money to pay it off, make a credit card debt settlement, or file a consumer proposal or bankruptcy.

    Before choosing an option to deal with your credit card debt you must look at many factors as you want to make sure that you select the option that will help you to achieve your long term financial goals. Why are you having a problem paying the credit card debt in the first place? Often times people stop being able to manage their credit card debt because of a lack of cash flow. If you are at the point where you cannot manage your credit card debt payments because of a lack of income then you may want to look at ways to reduce the credit card debt before you start trying to come up with a way to pay it off.

    The state of your credit report is also an important consideration when trying to come up with a plan to pay off credit card debt. If you fully defaulted on the debt (have not made a payment in 6 months) or have made habitual late payments, your credit report is likely to be in bad shape. Once your credit report is compromised, (whether you pay off the credit card debt in full or make a credit card debt settlement) there will be no difference in how long it takes to rebuild your credit. There will however be a major difference in how much it costs you to pay off the credit card debt.

    A credit card debt settlement can be achieved through a financial consultant who can make a credit card debt settlement directly with your creditor or through obtaining the assistance of a trustee to make the credit card debt settlement through a consumer proposal. The credit card debt settlement option will depend on many factors including your income, employment, financial goals, the amount of debt you have, the liquid cash available, and the number of creditors you have. If you want to make a credit card debt settlement, work with a financial consultant. He or she will be able to interpret your entire financial situation and come up with the best plan for you.

    For more information about how to make a credit card debt settlement please contact Michael Goldenberg by calling DebtCare Canada at 416-907-2582 or visit www.debtcare.ca.