Canadians’ confidence in the economy and their own personal finances is up, and with it came to an uptick in 2019 holiday spending: up 1.9% to an average of $1,593 CAD (PwC).
But this positivity comes with credit concerns, as Canadians worry about credit card debt piling up.
Is your credit card feeling particularly vulnerable after the holiday season? Did you know, 50% of cardholders only pay the minimum balance and for those who do just pay the minimum balance, it will take up to 20 years to clear the entire debt. Is there anything that can be done to gain financial independence this New Year?
Here are 5 practical tips to save money in order to clear that credit card debt:
1. Rethink your internet and TV provider
The telecom industry is competitive that there’s always a good deal to pick up. Watch more Netflix and YouTube than cable TV? Consider downgrading your cable TV package and put the difference towards your credit card balance. Also, if you have 6 months to a year left on your contract, your current providers’ competitors will pay the penalty to break your current contract while offering you an awesome deal for up to 6 months on a TV-internet package. The switch could save you hundreds of dollars throughout the 6-month promotion under your new contract.
2. Bring your lunch to work
It costs $2.00 to make a sandwich in the morning whereas it costs on average $6.00 to buy it at the store. In 2020, you will save yourself over $900 by packing your lunch for work.
3. Buy generic food brands
There are big savings on tea, coffee, and cereal in particular. When grocery shopping, always compare unit price as opposed to pack price and price by the pound.
4. Switch your credit card balance to a more competitive rate
The MBNA True Line® Gold Mastercard® is the most competitive right now at 8.99% APR but the MBNA True Line® Mastercard® is best for balance transfers. However, the MBNA True Line® Mastercard® comes with a balance transfer fee of 3% on top of the annual APR rate of 12.99%.
5. Refinance to pay off high-interest debt
If you are under pressure to maintain all your monthly debts, refinancing to consolidating all your debts into one low monthly payment may be your best option. By refinancing your mortgage, you can currently access up to 80% of your home equity to refinance and pay off high-interest credit card debt.
