Posted on Tuesday 20 October 2015
Are you aware of the facts and myths associated with settling your mounting credit card debt ? This does apply to those who struggle with climbing interest rates and late penalty payments on credit cards too. Year after year consumer debt has risen 4.9%, according to financial analysts and this gives pause for concern when it comes down to Canada's financial stability. One of the most prevailing factors we want to discuss here has to do with Canadians ballooning debt and unfortunately too many families living above their means. This has led to the current mounting household debt crisis and the lack of ability to pay this down in a timely fashion. Clearly, educating Canadians on how to manage their credit card might be seen as dire, as opposed to hitting a financial crisis.
Believe it or not, cutting a credit card up or calling the company and having it closed are not wise choices. These acts can make financial matters worse, though very few Canadians are aware of this. Did you know that if you have a credit card and you don't use it enough you can also suffer from a dent to your credit report and receive a penalization from the credit issuer too? All of this just might have you pondering how Canadian families are supposed to curtail spending and how they can manage and balance their credit cards more efficiently? The following myth busters will help you learn how to properly manage credit card debt so you can finally see some hope from crushing household debt .
Debt consolidation is not always the best way to move past credit card debt
Getting a loan online to pay off your credit card can be an expensive option and what many Canadians don't realize is that it doesn't just do away with the blemishes that are on a credit record. You'll still have a trail, even if it is shown you're making consolidation payments. Consider all your options before going with this.
A financial advisor can be extremely expensive and not always the answer
Many Canadian advisors are paid through commissions, which doesn't place their interest directly with the consumer. What does this mean? It means they might advise you in the wrong direction and cost you more money in the long run. Weigh your options here carefully!
Credit card debt is necessary for improving credit scores and paying bills on time
So many see credit cards as a way to immediately improve their credit scores , but the reality is that it takes a great deal of time for specific credit cards to do this. One time of getting behind on a payment is all it takes to curb your credit score in the wrong direction.
Paying only the minimum credit payment will keep me in good standing
Paying only the minimum payment will sink you further and further into credit card debt. Here is another fact: credit card companies will reward you for making that minimum payment on time every month by offering more credit every 6 months. You should avoid this type of pitfall.
Paying off old, adverse credit card accounts will improve your credit score
This is not so. Little do many Canadians know that paying off adverse credit card accounts won't make an immediate improvement in their financial portfolio . This will show as paid off, but it will take up to 6 years for the score itself to improve and offer a positive influence.
Credit counseling services are available for Canadians all across British Columbia who are struggling to keep up with debt and find viable ways to control and minimize it. Don't fall prey to the consolidation scams and other myths out there that can create more adversity financially. There is certainly a solution, but it takes time. Just remember, you didn't create this debt overnight, so have patience and focus on positive reinforces that will guarantee you move past it.