Credit cards might make us feel shiny and satisfied when we use them. But they can also make us feel a bit (or a lot) of dread when the bill shows up in the mailbox (or the inbox.) Credit cards can be a great tool to help young and new Canadians build credit, but they can also become a burden if they aren’t used responsibly.

In April this year Statistics Canada released a study detailing the topic of household debt. Between 1999 and 2016 the average Canadian homeowner household had non-mortgage debt at an average of $18,1000. In addition, households that had a positive outlook for the future had $6,800 in non-mortgage debt compared to households with negative or neutral outlooks for the future. In essence, families who had positive outlooks had higher debt-to-income ratios than other families and were more likely to increase spending and take on more debt previous to an expected increase in employment income.

Lump it together

You might think its okay to count your chickens before they hatch, but it will always be a gamble. The anticipation of an expected pay raise may set off the desire to start spending money you don’t have yet, but there’s no guarantee you’ll really be able to pay it off. Don’t commit to a purchase until you have proof that you can afford it. However, if you’ve already gone out and spent the money and now find yourself under an increasingly worrisome amount of debt, read on to find out how to lump it all together and pay it down fast.


Credit cards are useful and dangerous tools. Left unchecked, they can turn into a burden with staggering weight, seemingly overnight. Your first step is to be honest with yourself and take a good look at the problem, head on. It may be shocking and even painful but once you know what you’re dealing with you’ll be better able to deal with it. Chances are you’re spending more on debt each month than you want to or can afford. You can continue trying to live paycheck to paycheck just hoping that “one day” you’ll be done with the payments. Or you can look at debt consolidation.

How it’s done

Credit card debt consolidation is done by taking all of your various credit card debts and lumping them together into one larger piece of debt. This can be done with a line of credit, a home equity line of credit (HELOC), a low interest credit card, or a balance transfer credit card. Typical credit cards have high interest rates of about 19.99%. But these consolidation tools have much lower interest rates of 5% or less. Some even have temporary interest rates of 0%!

Once you’ve chosen your consolidation tool you’ll only have one payment to worry about and more of each payment will go toward the balance (compared to your previous high interest credit card payments.) Additionally, any extra payments will help knock away at your debt, and you won’t pay any penalties for it.

Don’t give up

The trick with debt consolidation is to not give up. Most especially, don’t fall into the trap of taking on more debt. Because your payments are likely to be smaller than before there may be the temptation to keep spending the available balance and keep your limit maxed out. Don’t do it! If you know you’re likely to do it, then cut down your credit limit or close your line of credit or credit card. You’ll still have to make your regular payments, but you won’t have access to the available limit. Stay accountable by printing out your repayment plan and putting it up somewhere you’ll see it every day. Keeping your debt repayment plan at the forefront of your mind will help you to stay on track.

Making a plan to pay off your credit card debt (and sticking to it) is only the first half of the solution. The second half is to find out why and how you ended up in debt to begin with. Take an honest look at your spending habits and figure out what went awry. Until you do and make some changes to your behaviour you’re bound to end up in debt again and again and again.

To find out which debt consolidation tool is best for you, contact us today!