Credit Score Infographic Payday Loan GoDay.ca

Pay Off Your Credit Card – Part I

goday.ca credit card debt tips

Credit Card Debt Woes? Hope is not lost.

Feel like you’re drowning in a sea of credit card debt? You’re not alone. According to a recent study in December 2012, one in twenty Canadians are encumbered with so much credit card debt, they’re certain they’ll never pay it off, and half of Canadians with credit card debt often carry a balance.

There are many situations in life that can cause one to take on thousands of dollars in credit card debt. Whether you’re a post-secondary student who had to depend on credit for the increasing cost of supplies and living expenses (or maybe even tuition?), or you’ve lost your job and use your credit to get by between positions, or an unexpected repair or illness has left you reaching for the plastic – there are ways to get back on track and pay off your debt. It won’t be easy, but with some serious dedication and reigning in on expenses, you can be on your way to being credit card debt free.

We won’t waste your time and give you unrealistic advice. We want you to be financially independent and offer you the most basic financial advice to get you started. Regardless of where you are in your finances, believe you can get ahead. It may take some sacrifices, but trust us, it’s worth the self-denial.

 

GoDay.ca Credit Card Debt Management

Credit: Suat Eman

 

Cut the “needed” expenses.

We hate to admit it, but daily coffee runs are not needs. Lunches at Subway are also not needs. If you have the clothes you need for your work life and casual life, food in your fridge, gas in your car and your bills are paid up, try to reign in the “frivolous expenses”. They add up quickly.

Don’t think so? The average Canadian spends $2-$5 a day on coffee runs, or $10-$25 in a work week. You’re looking at anywhere between $40 and $100 a month! Imagine whittling away your debt by an extra $100 per month that you’d be otherwise spending on stuff that goes right through you.

If you’re like us, you most likely have a perfectly good amount of coffee to make at home or some sitting in your work kitchen. So, do yourself a favour – brown bag it/mug it every day. Make more things at home.  Adding ground coffee to your grocery list will be a few bucks, nothing compared to what you spend at the cafe. Besides, what feels better? The doughnut and coffee in your stomach, or knowing you’re that much closer to being debt free?

This is not to say you can’t go out to lunch or the movies ever again. By all means, treat yourself every once in a while – but it’s called a “treat” for a reason.

 

GoDay.ca Credit Card Debt Management - Groceries

Credit: Simon Howden

Critique your necessary expenses: Trim the fat.

Now that you’ve cut out some costs you can do just fine without, look at other ways of fine tuning what you do need to spend on. Your grocery list is a great place to start.
Can you carve it down by not buying name brand items?
Do you depend on ready-to-eat food? We know sometimes it’s just faster and easier to get pre-made dinner, but trust us, it’s an expensive way to live.

Why get a pre-made BBQ chicken for $13 from your grocers when you can buy a $6 frozen one and slow roast it in the oven, when you’re otherwise being productive at home? You will get multiple meals from it and you’re saving half the cost.

 

Canadian money

Pay more than the monthly amount – if you can.

Now that you’ve found ways to lower your expenses, it’s time to put it towards your monthly payment. The quicker you pay off your debt, the less interest you’ll pay. When you get that credit balance down to $0 (and you will!), keep using it, but make sure to pay the balances off every  month.

 

GoDay.ca credit card debt management

Get a card with a lower interest rate.

As long as you carry a balance, you’ll be paying interest. It’s unavoidable, but there are ways to be smart about this part of debt repayment, too. Consider getting a card with a lower interest rate. What is considered high? If your card has a rate of 15% or more (we’re looking at you, student & retailer credit cards), get something else.

You can either transfer your balance to another card (though this might mean applying for a new one, which would affect your credit score) or you can ask your lender to switch your terms. Keep your eyes open for special promo offers, too, that offer low introductory rates. If you’re offered a card with a temporary 0% rate, it might be worth the ding on your rating (depending on your debt) to transfer over a balance and attack it before the 0%  fades.

Support System - GoDay.ca Credit Card Debt Management

Most of all – look for support.

This won’t be easy. It may very well mean changing your very lifestyle. Stay focused on the enormous gain at the end of all your hard work – your friends and family will undoubtedly respect you for being so dedicated, and they’ll understand why you want more “dinner’s in”.

Leave a Reply

Your email address will not be published. Required fields are marked *