There is a good reason that credit cards have become so popular among Canadians over the years: the sheer convenience of not needing to carry cash, as well as not needing to pay upfront, is obvious advantages. However, the rise of subsequent credit card debt for credit card holders is a clear indication that this method of payment can be easily abused.
In fact, choosing credit cards—especially multiple cards—over paying with cash has caused significant financial struggles for many Canadians. To counteract this problem, individuals who are facing money issues, including overspending or credit mismanagement may wish to contact D. & A. MacLeod Company Ltd. We are licensed insolvency trustees. Our professional financial advisors can offer significant advice on how to overcome these difficulties, such as seeking a debt consolidation loan or filing a consumer proposal to avoid bankruptcy.
POTENTIAL CONSEQUENCES
Using even just one credit card on a regular basis can pose problems for someone who has greater expenses than income or who is not cautious with his or her spending. Having more than one credit card creates serious potential for accumulating debt and earning a negative credit rating.
Individuals who have more than one credit card may simply be more susceptible to miss payments—either out of genuine forgetfulness, having trouble affording the purchases once they come due, or a combination of both. Ironically, some individuals may open a credit card as a direct result of needing to pay off another, which will often lead to a vicious cycle of loaning and ultimately lead you to accumulate debt that begins feeling inescapable.
TIPS TO AVOID PROBLEMS STEMMING FROM MULTIPLE CARDS
With multiple credit cards, it is even more important to be conscious of paying on time (at least a few days in advance to ensure it is processed by your due date), paying in full (as often as possible, or the minimum amount indicated at the very least), staying at or below 30 percent of your credit limit, and aiming not to spend more than what you can actually afford. Speaking to a licensed insolvency trustee in Cornwall, Ottawa or one of our other 7 conveniently located offices in Eastern Ontario are able to explain these matters with you further.
Although having more than one credit card can actually help your credit rating, it is important to avoid requesting multiple cards from lenders within a short period of time as this may appear worrisome and lead to a decreased score. Another factor that many people do not consider is that having multiple cards could actually lead you to neglect using some of them, thus rendering them inactive. While not all financial institutions will penalize you for this, experts recommend checking what the parameters of inactivity are if you think this may be an issue.
OPTIONS FOR ADDITIONAL SUPPORT
There are other options if you are struggling with money and accumulating debt that do not involve filing for bankruptcy, such as securing a debt consolidation loan in Ottawa or filing a consumer proposal. While it can be difficult to manage your finances on your own, a licensed insolvency trustee in Cornwall or Kingston like D. & A. MacLeod offers useful guidance to individuals and businesses alike.
We can review your financial situation with you and provide money management tips—such as budgeting, advice on credit card usage and obtaining a debt consolidation loan. For individuals facing financial problems and what may seem like un-affordable expenses, speaking with a licensed insolvency trustee in Kingston, Cornwall, or one of our other offices as early as possible will often help you avoid letting debt become increasingly difficult to overcome. Call us….we can help.