Canadian household debt was creeping near a record high before the COVID-19 pandemic hit. Fortunately, the crisis managed to bolster the financial health of Canadians. Spending on leisure activities took a massive hit, which lead to an increase in the savings rate for the average citizen.
A recent report from Equifax showed that half of Canadians improved their credit scores in 2020. Credit card spending fell which led to lower balances from paying down debt.
The pandemic is drawing down in Canada, but citizens need to stay vigilant. Today, I want to look at three ways Canadians can continue to pay down credit card debt in 2021.
Consider a balance transfer credit card
A ballooning credit card balance can be daunting for consumers. Sometimes, it can seem like an insurmountable hill. For those in this predicament, you may want to explore a balance transfer credit card.
This allows you to switch from a credit card with high-interest payments to one with low or even no interest in the opening months. This can help you put a significant debt in your balance and pave the way to zero debt.
Look into a debt consolidation loan
This is another option for those struggling with credit card and other forms of debt. Some lenders can offer you the chance to pursue a debt consolidation loan at a lower interest rate. This is another method to escape the potential treadmill of carrying over a high balance on your credit card.
Build a budget to pay down debt
Many Canadians may find it a challenge to secure financing. In this instance, it may be time to construct a strict budget and stick to it. This is an arduous but often rewarding process that will lead to lower debt going forward.
