The Cost of Credit Card Debt

The Cost of Credit Card Debt.jpg

The Cost of Credit Card Debt

Updated:  March 2, 2022

According to the Canadian Bankers Association, as of March 21, 2021, there were 76.2 million Visa & MasterCard in circulation. That means the average Canadian consumer has just under 2 of these products, which does not even include all of the retail and other credit card products.

The statistics show that 70% of consumers pay their balance in full each month and pay no interest. What about the other 30% of consumers who carry a balance? How much interest are they paying each month, and how long will it take them to pay off their credit card debt?

Most credit cards require that you make a minimum monthly payment equal to 3% of your outstanding balance. With an average credit card balance of $3,630, your minimum monthly payments would be $109. If you stopped using the card today and made only the minimum payment each month, it would take you 18 years to pay it off the debt, and it would cost you $3,828 in interest over and above the principal, WOW!  Now imagine what the cost would be if you had several credit cards.

Consumers should visit the Financial Consumer Agency of Canada (FCAC) website for an extensive list of cards and features, and use the credit card comparison tool to help select the card that best suits their needs.

If you are struggling to keep up with credit card debt and don’t see your balances decreasing, this is a sign to seek professional help. A Licensed Insolvency Trustee (LIT) can review your financial situation and help you find the best strategy to deal with your credit card debt.

Powell Associates Ltd. is a Licensed Insolvency Trustee. We are experienced, hands-on insolvency practitioners who understand the personal impacts of major financial stress;

  • You won’t be stuck in an assembly line process.

  • You will expect and receive prompt responses and resolution of issues from our supportive and experienced team.

  • We will review your debt solution options, including filing a consumer proposal or personal bankruptcy.

  • We help Canadians with overwhelming debt get fresh financial starts.

Once you file a consumer proposal or personal bankruptcy, we deal directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you. Contact us for a free consultation.

We offer free consultations to review your financial situation and practical debt resolution options. Contact us to discuss your situation over the phone, a video chat, or in-person in Saint JohnMonctonFrederictonCharlottetownDartmouth, or Miramichi.