There are few things that cannot be purchased with credit. Whether it’s your morning coffee, a new pair of jeans, a night out with friends or a vacation, cash or a debit card is no longer required to fund lifestyle choices. From the moment someone turns 18, using a credit card or line of credit is the “new normal”. It’s important to build a good credit rating but using credit responsibly and managing cash flow is key. Is it ok to carry a balance on a few credit cards or a line of credit and only making minimum payments every month?
With spring comes a crop of high school, college and university gradua
tes with dreams of taking on new challenges and putting their newly acquired knowledge to good use. Once you have landed a job, there will be an urge to start spending and living. Lenders know this and want to be the first to offer credit. They want to be first out of the gate to harvest a long term client that may someday need a mortgage or a place to invest retirement savings. Before that will come offers of credit cards, lines of credit and loans to finance purchases too expensive to finance with the new pay cheque.
You have to know when to apply the brakes. As long as you are making monthly payments on time, lenders will often entice you to raise your credit limits because you have a good credit rating. Once you miss a few payments, it’s a slippery slope. How much debt is too much?
Here are some signs that you are carrying excessive debt and should ask for professional advice:
- your credit cards or line of credit are maxed
- you are behind on rent, utilities or can’t afford minimum payments on debt
- you are taking cash advances on one card to pay other cards, loans or bills
- you have stopped opening your mail or answering calls from collection agencies
- a creditor has garnished your wages or frozen your bank account
- you have trouble sleeping because you are stressed by your financial situation
Licensed Insolvency Trustees (LIT) are the only professionals in Canada able to offer protection from creditors through consumer proposals and bankruptcies. LIT’s are regulated by the federal government and must follow strict licensing, training and legal requirements to practice. LIT’s will explain various options to address financial crises: debt consolidation, refinancing, selling assets, family loans, as well as formal options such as consumer proposals and bankruptcy.
Most can avoid bankruptcy if they ask for advice before it’s too late. Consumer proposals may be a viable option to get immediate protection, settle debt with an affordable monthly payment and press the re-start button. Your future can be bright if you take the time to ask the right person for advice.
If you need help with your plan or are burdened with debt stress, asking for sound advice is a sign of strength and the smart thing to do. Asking sooner rather than later is always better. Call Doyle Salewski today for your free, no obligation consultation. You’ll be glad you did.