CU TIP: Credit Card Debt. What To Watch Out For

A recent study indicated that there are over 44 million credit cards in circulation across Canada, which translates to 2.9 cards for every adult Canadian over the age of 18. The study found that almost half had unpaid balances! Another survey revealed that 41% of all Canadian credit card holders are not aware of the interest rate charged by their main credit card company and 21% of cardholders rarely or never pay their bill on time!

The Credit Union is here to help our members avoid the pitfalls of excessive credit card interest. Here are some tips to keep you in control.

• It’s important to remember that another word for ‘credit’ is ‘debt’. Start thinking of your plastic as ‘debt’ cards and you’ll have a better understanding of what ‘credit’ cards are all about.
• Use only one credit card rather than juggling between 2, 3 or 4 cards.
  Avoid writing cheques or taking cash advances on a credit card because the interest (which normally varies from 17% to 30%) is effective immediately.
• Make a habit of paying the 'new balance' each month to avoid interest charges. If you don't have the cash on hand, it makes good sense to pay your credit card balance off with a low interest line of credit or a loan from The Credit Union.