Credit Counsellors AdviseCredit Counsellors Advise

When people use their credit cards, it seems that the world of shopping is infinite. This holds true for many of our Canadian citizens as well. Plastic makes the act of borrowing money and going on a spending-spree, hurt less. No conscience will nag you about your budget when you can't see the actual cash in your wallet diminishing. Often, most of us justify an unreasonable purchase even if we're down to the last cent. Anyway, the mighty and dependable credit card is there to rescue us from the sorrow which is economics. By the end of the month, reality hits us when bills pile up to be paid and no cash is at hand. Somehow, you get by with the help of your plastic friend and the cycle repeats again for the next months to come.

This sounds all too familiar. Many citizens are completely clueless when it comes to how much their debt is spiraling, or worse, increasing. About one third of Canada's total population of credit card owners is unable to pay off debt in the interest-free period. The result of this is that Canadians now carry an estimate of $50 billion in debt which continues to grow in interest. This from credit cards alone.

The goal of every lending institution is to get new customers to borrow and to get old customers to borrow even more. They have thought of every gimmick and promo in the market like the initial low interest. In order to convince people to transfer their credit card balances to another company, lower rates are offered. As a bonus, even the balance transfers are free of charge. However, what most of us are unaware of it the fact that these fantastically low interest rates, do not last. Some lending institutions let you keep the rate for about six months. After that time, expect a much higher interest than what you were promised earlier. If they do maintain the low interest, never be late in your monthly payments otherwise, the penalty interest will be so high. For delayed payments, interest can be charged on all your new purchases for the next two months.

Lending institutions like to raise a customer's credit limit to get them to borrow more. It is legal for them to do so without requesting for your permission. Naturally, people will tend to spend more this way even if they can no longer afford to fit the payments in their monthly financial plans.

Cash vouches are another means to get customers to splurge. The minute these vouchers are cashed, they are inserted in your credit card balance. Watch out for these vouchers during peak seasons of shopping, usually the holidays.

Credit card counselors advise people to pay their card debt fully every month. This practice ensures that an individual or family will only spend what they are capable of paying off. If not, debt becomes an extension of income. When this happens, people are tricked into thinking they have more disposable income when it fact this plunges them only further into financial burden.

Senior citizens and university students are easy game for lending companies. The policy for this market is to give them high-limit cards that they will end up paying for 10 years, if they are not careful.
by Maggie Z. Mathews
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Maggie Z. Mathews Vancouver Coqutilam Auto Financing New Chevrolet GMC Trucks British Columbia Eagle Ridge British Columbia GM Pre Approved Credit MR GREEN DELIVERS 1000 vehicles 5 minute approval  
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