It’s easier than ever to rely on credit cards to pay for things, especially during challenging times. According to credit monitoring agency Equifax, Canadian credit card debt rose by 13.7% in one year.* As the cost of living continues to increase, people are using their credit cards to get by and getting stuck in a cycle of debt. If you're carrying a large credit card balance month to month, we've got some tips to help you take back control of your credit card.

Why pay down your credit card?

It’s important to tackle your credit card debt for one huge reason: the interest. If you were to chip away at a $1,000 credit card balance (with a 19.99% interest rate) by only making the minimum monthly payment, it would take you over 10 years (!) to pay off the balance. Why? The interest compounding on the balance owed makes it the biggest thing you end up paying, rather than the original purchase itself.

So make today the day you start tackling the debt with these tips:

• Kick start your new payment strategy by making a payment right now, even if it's only $10, $50 or $100.
• Get into the habit of paying more than the minimum amount due, so you pay down the balance, rather than just the interest.
• Transfer your credit card balance to a lower rate card — check out our Collabria 0% balance transfer offer where you'll pay 0% interest for 9 months + small transfer fee. (Offer ends June 30, 2025.)
• Bundle your outstanding debt from multiple credit cards into one consolidation loan. The benefits:
  • You only have one monthly payment
  • The loan tends to have a lower interest rate than the credit card, helping you get ahead

As you work towards overcoming credit card debt, be prepared for a few growing pains as you change your relationship with your credit card. Think of that deep sigh of relief you'll take when you see your debt getting lower and lower. You can lift the debt weight by following these tips. If you have any questions at all, chat with us today. We're here to help you improve your financial health, starting with shaking off that debt!

*Economic Pressures Could Impact Credit Performance of Consumers, Especially Young Adults: Equifax Published on August 27, 2024.