We are in the middle of a rising interest rate environment
and as a result, we have one foot in a credit trap.
Most analysts are sounding the alarm on a possible deteriorating economic future. More and more consumers are using high-cost/interest debt to cover their daily living expenses.
Credit cards are a particular area of concern, as these sources of credit are relatively easy to access. This emergency source of income is being used to buy groceries, gas for the car and even make the mortgage payment. Doing that too many times you run the risk of your debt getting out of control and the monthly interest charged too high. Visit the following article for tips on avoiding this trap.
Credit Card Trap
Easy access will get some people into trouble in the long term. Although our parents’ generation may have paid off their credit card every month, most Canadians today live beyond their means. Credit cards account for 55% to 60% of a borrower’s debt load. As a result, the average person has six or seven creditors, four of them being high interest credit cards. With high rates and large minimum payments most Canadians can’t afford to live.
The first interest rate increase occurred about a year ago. As a result, rates will continue to inch higher and more Canadians will feel it. Household debt and the effects of rate hikes on secured line of credits are expected to continue. Consequently, this will have a significant effect on household cash flow. As minimum payment get missed, your credit worthiness will deteriorate.To clarify, this downward spiral or credit trap, will have negative consequences if you let it go too long.
Take a serious look at your debts
Do not be reluctant to get professional help. If you do not know where to go or feel helpless, call me. I can help. If you are one of 40% of Canadians that is concerned about your existing debt load, you are not alone. Act soon and set your mind at ease. Jennifer Rossides an Ottawa mortgage broker will work on your behalf to achieve financial independence. As an accredited mortgage broker in Ottawa I can help you. Please give me a call at 613-867-8076 or send Jennifer Rossides an email at firstname.lastname@example.org Start today to find a Smart Mortgage Solution that’s right for you.