Loading articles...

Many of us will need a year to pay off credit card debt

THE ASSOCIATED PRESS/Mark Lennihan, file)

Nearly half of all Canadians with credit cards carry a balance from month-to-month. Forty-six per cent are in debt “always or often,” according to a new Harris/Decima survey, commissioned by bankruptcy trustees Hoyes Michalos & Associates.

Douglas Hoyes explains it’s too easy to get into trouble.

“One dollar at a time. You have a credit card, things are good, you spend some money on it and then there’s a shock in your life. Either you lose your job, or your hours get cut back… it may be a medical problem, you get separated or divorced and as a result, you get all this debt.”

The bankruptcy trustee says the best advice is to always pay your credit card balance in full, each month. If you do get into trouble, talk to a credit counsellor right away.

“The sooner you deal with it the better,” adds Hoyes. “The first thing [a credit counsellor] can do is help you do is understand what your expenses are. Maybe you can cut your expenses yourself and get out of debt on your own.”

“If your expenses are just too high [and] your income isn’t high enough, they can show you the other options that are out there, [such as] a debt-management plan or a consumer proposal, which is a way to make a deal with the people you owe money to so you end up paying less than the full amount owing.”

The survey found that one in four Canadians who carry a balance on their credit cards from month to month will need at least a year to pay off that debt, while one in 20 believe they will never be able to do that.