Debt – it’s almost like a four-letter word, right?
Though it’s not widely discussed, it’s something that many Canadians (specifically Victorians!) deal with.. whether they like it, or not.
Debt can come in many forms, from student loans, to mortgages, to credit cards, but fortunately, as daunting as it can seem sometimes – you’ll eventually be able to see a light at the end of the tunnel!
Thankfully, interactive and educational Facebook groups like Black is the New Red exist, offering up solutions and a platform to discuss all things financial – even the not so fun stuff!
Greg Best, Licensed Insolvency Trustee at Smythe Insolvency Inc. has shared some great tips on how to handle the dreaded D-word:
1. Know where you stand
It’s all about gathering all of your debt-related data – it’s easiest to organize your recent bill statements for credit cards and loans.
2. Make a list of your debts
Everything is better in list form! Make sure to keep track of each creditor’s name, your balance, the minimum payment and interest rates.
3. Request a free copy of your credit report
This is an easy one! Many companies offer free credit reports, so it makes sense to take advantage. Check out one example here.
4. Choose a credit card with a lower interest rate
This seems like a no-brainer, but many people choose credit cards not really considering the interest rate and how much they’ll end up paying towards it in the long run.. Choose wisely!
5. Try to avoid switching credit cards
Even though those extra points or perks look appealing, try to limit how much you bounce from card to card just for their reward system – it could come back to bite you in the long run!
6. Ditch pay-as-you-go cell phone plans
There are a few cons to the pay-as-you-go cellphone route, the biggest ones being that it’s much easier to rack up the dollars when you’re constantly topping up, the second being it’s not a good way to build your credit!
7. Maintain a good credit card balance ratio
Ideally under 50%, it’s always a good idea to keep your balance low – another perk being it keeps your interest low, too!
8. Seek help with CRA debt or student loan payments
Consulting a Licensed Insolvency Trustee is the best option for eliminating or negotiating CRA debt or student loan debt – you definitely do NOT want the CRA as a creditor!
9. Don’t apply for several loans or credit cards all at once
Sometimes it’s tempting to apply for multiple cards or loans at the same time – but less is more! More cards and loans mean more debt for you in the long run.
Another great way to squash debt and de-clutter (spring cleaning, anyone?) is to put items you no longer use on many of the used and swap and shop websites – MOOLAforDEBT is even running a contest where you can win a $500 prepaid VISA for doing so!
Also, don’t forget to join Black is the New Red on Facebook to keep up on the latest financial news are discussion – debt related or not!
Adulting 101 series:
- Adulting 101: 5 things you need to know before tackling your taxes this season
- Adulting 101: 8 tips you need to know before buying a home in Victoria