How to Reduce Credit Card Debt

Every time you borrow money, you're robbing your future self.”
― Nathan W. Morris

According to credit reporting agency Transunion, the average credit card balance of Canadians at the end of 2023 was $4,265. It was $7,236 for Americans.

 ● Use your credit card sparingly—only for booking flights and hotels.

● Make a plan to pay off the balance on your credit card by trimming your budget. Reduce spending where you can.

● Your credit card is a form of revolving debt, which makes it hard to pay off. Keep only one card and cancel the others.

● As much as possible, prepare home-cooked meals instead of eating out.

● If your credit is clean, consider transferring the balance on your credit card to one that offers a lower interest rate. Don’t be tempted to accumulate debt again.

● If you have substantial revolving debt, consider obtaining a consolidation loan. These loans have a fixed payment amount and a specific repayment period.

● Negotiate a lower interest rate on your credit card with your bank.

● If you find it challenging to pay off your credit card due to extenuating circumstances, such as job loss or illness, seek credit counselling.

Keeping a balance on your credit card drains your finances. Missing payments can also impact your credit score, and in a rising interest rate environment, this situation can only worsen.