Holiday hangover arrives with credit card bills
Time to put away the plastic, advisers say
With post-holiday bills piling up even faster than food on Christmas dinner plates, experts say now is the time to hide those credit cards.
The average Canadian's consumer debt is expected to climb by more than $1,100 next year, according to an estimate prepared by TransUnion, a credit counselling service, and much of that spike will be due to the almost irresistible lure of Boxing Week sales.
Scott Hannah, an adviser with the Credit Counselling Society, says the first thing people should do is consolidate their debts "so they have one monthly payment that fits their budget at an interest rate that's much lower."
"But before we do that we have to make sure our budget's in balance. Otherwise what can happen with a lot of people is they'll consolidate their debts and keep using their credit cards. You can't get out of debt if you still use debt," Hannah told CBC News.
"So the credit cards have to go away. This time of year, put them on ice, it's easy to do."
But all the worries could be avoided in people set a holiday budget early and put money aside in small instalments all year, he said.
It appears rising debt levels are finally making an impact on Canadians.
According to a recent Google Consumer Survey commissioned by TransUnion:
- Almost half of Canadians surveyed said they plan to commit to at least one financial resolution in 2014.
- Nearly a quarter said they plan to save more money.
- Another quarter said they plan to pay down existing debt.
- An additional quarter said they plan to spend less money on unnecessary expenses. The study also found that twice as many (37.3 percent) did not reach their financial goal in 2013 compared to those that did.