What You Have to Know About Credit Card Debt Consolidation in Canada

Canada has about 43 million active credit cards at present time according to TransUnion. This huge number of credit cards for Canada’s population of 35 million means that people who do have credit cards have multiple ones, which means that there is an increased probability of them having issues with paying their credit card debt on time.

Why Go Through Credit Card Debt Consolidation?

The above is supported by the fact that an average Canadian has a credit card balance of about $4,100. From this data, it can’t be denied that having credit card debt is a typical problem most Canadians have. Fortunately, credit card debt consolidation is a lot easier to pull off these days as compared to years before.

Credit card debt consolidation is a solution for managing multiple credit card debts to make them easier to pay and manage. It works by combining several credit card debts into one loan with a lower interest rate. By having only a single bill with a lower interest rate to pay, it will be much more doable to pay on time and get loans fully paid off faster.

Options for Credit Card Debt Consolidation

In planning for a debt-free future, you have to make sure that the credit card debt consolidation option you pick is the one that will work best with your financial situation. Read more below!

  • An Unsecured Personal Loan is quite common but can be very challenging to qualify for plus come with relatively high-interest rate compared to other credit card debt consolidation options.
  • A DMP or a Debt Consolidation Program is great for those who need consistent guidance throughout the time they’re trying to go debt-free but will probably not be a good option for those who are more independent or those who have time to go on scheduled meetings with a debt counsellor.
  • A Credit Card Balance Transfer just transfers debt into another credit card with a lower interest rate to allow you to save on interest as early as possible. However, this comes with a fee which may or may not be worth it depending on the money you’ll save on interest. You can save more if you’re able to work with lenders that offer very low transfer rates if you know who to approach and when. 
  • A Home Equity Line of Credit or a Home Equity Loan for debt consolidation is easier to qualify for because these types of loans are secured by the equity of your home. Some lenders will even lend to homeowners who are self-employed or those who have a poor credit rating. Home Equity Loans and HELOCs also allow you to access larger sums of cash if you have a large enough home equity.

Benefits of Credit Card Debt Consolidation

Consolidating credit card debt not only saves you money in the long run but can substantially improve your finances right away. With time, it can also improve and repair bad credit score. If you’re looking for help with credit card debt consolidation, contact us so we can save you time and money by guiding you with making the right choice at Mortgage Central Canada!