The Bank of Canada (BOC) has made another interest rate increase.

As of October 24, 2018, the BOC interest rate is at 1.75% — the highest it has been since 2008.

The Canadian and U.S. economies, job growth, and inflation were all taken into account. The BOC also discussed household spending as part of their justification.

“Households are adjusting their spending as expected in response to higher interest rates and housing market policies,” the BOC said.

“In this context, household credit growth continues to moderate and housing activity across Canada is stabilizing. As a result, household vulnerabilities are edging lower in a number of respects, although they remain elevated.”

Translation: the BOC believes that household debt is decreasing, and Canadians are spending less due to increased interest rates and new housing regulations, such as the mortgage stress test.

They say that Canadians are taking out less credit and are able to afford the credit they do have.

Of course, that may be true generally, but it is not always the case. Canadians may be taking out less credit, but they may also be struggling to pay off current debts.

For example, if you have a high amount of credit card debt, your credit card interest rates will take a hit with the latest increase.

If you had a credit card with a 20% interest rate before this raise, that would now be a 20.25% interest rate. A small hike, yes, but it could make a big difference.

Apply that increase to all of your debt — can you afford the extra payments?

And even if you can afford the extra payments, is that the best use of your hard-earned money?

Whether you are carrying a high amount of debt, a low amount of debt, or want to take on more credit with a plan for repayment, we can help.

At DebtCare Canada, we’ll help you build a plan for debt consolidation, credit repair, and more.

The next BOC rate announcement is scheduled for December 5, 2018. The BOC said that more increases are on the horizon in 2019, and possibly sooner.

Get in touch before then. Call 1-888-890-0888 or visit www.debtcare.ca.