Tackling debt

Here’s a simple fact: almost everyone has debt of some kind. Whether because of loans for education, our cars, or our homes, nearly all of us carry debt we need to manage responsibly. Too often, people are too embarrassed about their debt to get the help they need to properly manage it. And that is how debt can pile up.

Check out these tips for managing debt. They will help you to manage your spending, reduce what you owe and learn to ask for assistance if and when you need it.

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Expand Why is managing debt so important?

Imagine being debt-free. If your debts were paid off, you could have more money available to save for retirement, emergencies or vacation. You might also get access to better interest rates when you do need a loan. Most importantly, you could stop worrying about how to make ends meet and enjoy more peace of mind.

Expand How can a budget help me manage debt?

A budget is an itemized summary of estimated income and expenses for a given period. If you have never used a budget to manage your financial needs, now is the time to start. Just follow these steps:

  • Track your spending to see where your money goes, relative to your income.
  • Find out how much you need each month to make all your payments.
  • Be as realistic with your budget as you can and stick to it. The trick is to manage debt so that payments are always well within your means.
Expand What are some good tips for managing debt?

Once you have a budget and know how much you have available to spend, use it effectively for controlling your debt. Here are some suggestions:

  • Pay more than the total minimum payment due. Even a little more each month can help reduce your debt faster. Pay the extra amount to the credit card balance with the highest interest rate first and you will save money over the long run.
  • Consider a balance transfer or debt consolidation loan—but only if you can save on interest and avoid getting into more debt.
  • Stop using credit cards for non-essential purchases—just say "no" when you do not have the available cash.
  • Cut back on your expenses such as restaurants and entertainment. Learn to use discount stores, wholesale clubs and coupons. Also, learn to negotiate with vendors-not every price is set in stone.
  • Earn more income with a part-time job, hold a yard sale or barter your talents for goods and services
  • Use unexpected money such as gifts or tax refunds to pay down your debt.
  • Talk to your creditors-depending on your financial situation, they may have suggestions or options available to help reduce your debt.
  • Do not be afraid to seek professional help if you need it. Visit External Resources for credit counseling assistance in Canada.

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Expand If I have a credit issue, what should I do first?

Maybe you have had some major credit trouble in the past and you would like to find a way to start fresh. Or maybe you never realized you had a credit problem until you were turned down for a loan or had your annual interest rate increased on an existing credit card account. All of these situations can be signs of a credit problem.

You cannot fix the problem until you know what it is. Therefore, your first action should be to get a copy of your credit report from a credit reporting agency. Visit External resources for links to their sites.

Expand How will reviewing my credit report help my credit issue?

Review your credit report carefully and mark every suspected error. If your credit report includes incorrect information, contact the credit reporting agency immediately. They will review your report, investigate your claim, and make any required correction(s).

Even if the negative items are true, you can still make things better. If the entry refers to an unpaid debt, contact the creditor to negotiate payment options. If there has been a dispute, you can ask the credit reporting agency to add a note to your credit report explaining your side of the story.

The good news is that, as you improve your credit habits, most of the negative entries may eventually fall off your report over time. This is more the reason to start as soon as possible managing your credit effectively.

Expand What should I do if I am in financial difficulty?

If you are experiencing financial difficulty it is in everyone's interest to get it resolved. Call our Customer Assistance team at 1-800-561-7849. The earlier you contact us the sooner we can work out a solution.

If your life circumstances have changed, such as unexpectedly losing your job or becoming ill, determine if you have optional Balance protection coverage on your credit card account. If so, your repayments could be covered.

Besides CHOICE REWARDS®, you can also get free help and advice from a wide range of External resources.