Given the rising expenses that all of us are facing today, it is easy to get in over our heads with credit card debt. Although credit cards offer the convenience of buying now and paying later, interest rates can overwhelm even the most responsible borrower, making it impossible to pay off what is owed. Many Canadians want to know how to pay off credit card debt, and we have put together this guide to help you pay off the banks and become debt free. The following are some of your options for taking care of your debt. They are listed in order from the most painful to the least difficult way of getting rid of the debt you owe on your credit cards.
File for Bankruptcy
When it comes to credit card debt Canada laws allow most of it to be erased when you file for bankruptcy. This is a viable option for those who have no other way of paying off their debt, but it should always be the absolute last resort. You should avoid bankruptcy at all costs, because a bankruptcy will ruin your credit for many years, and it may also lead to higher costs for insurance and other financial products. Unless you’re truly unable to make your payments, it will be better to use a different debt relief strategy.
Get Professional Credit Counselling
Professional credit counselling is less painful than bankruptcy because credit counselling will teach you how to manage Canadian credit card debt more responsibly, and it will also help you get the rest of your finances in order. Canada has many reputable credit counsellors who can help you get your debt under control and lay a foundation for a solid financial future. It is helpful to get counselling from the same firm that helps you consolidate your credit card debt (if you’re using one). After all, that company will know your situation best and be able to come up with a relatively pain-free way to retire your debt within the constraints of your budget. The downside of credit counselling is you will have to repay the full amount of debt that you owe. This is because credit counselling companies are usually only able to reduce the interest rate you’re paying and negotiate to extend your payment period. This makes payments lower (and easier to manage), but doesn’t affect your overall principal balance.
Consolidate Credit Card Debt With an Experienced Professional
When considering how to pay off credit card debt, one way to free yourself from the burden of owing money to creditors is to pursue credit card debt consolidation. An experienced debt consolidator will combine all your debts into one and secure an interest rate on what you owe that is much lower than the average rate you are currently paying. Furthermore, you may also want to consider other debt relief options such as debt settlement if you have more debt than you can handle. These options can reduce the actual amount of debt that you owe allowing you to get out of debt sooner.
Eliminating your credit card debts will help your budget and let you breathe easier. To get started, you can fill out this online debt relief application and a trained debt consultant will provide you a free debt consultation to help you get out from under your debt.