Canadians are feeling the pressure of rising costs, and for many, credit cards have become a financial lifeline. But as a new report reveals, many Canadians are relying on credit to cover everyday expenses which can quickly spiral into unmanageable debt.
The latest data shows that the average credit card debt among insolvent Canadians has surged to an all-time high of $20,398—up 26% in just one year. With mortgage renewals looming at higher rates and inflation still stretching household budgets, it’s more important than ever to take control of your finances before debt takes control of you.
If you’re feeling overwhelmed, know this: It’s never too late to turn things around.
There are always options to break the cycle and regain financial stability. Let’s look at what’s happening and how you can take proactive steps to improve your financial position.
The Debt Spiral: Why More Canadians Are Struggling
Debt doesn’t happen overnight—it builds up over time, often due to factors beyond our control. Right now, three major issues are pushing Canadians deeper into financial stress:
📉 Rising Credit Card Balances – More than a third of unsecured debt among insolvent debtors is from credit cards, with many using them just to afford basic necessities.
🏡 Homeowners Under Pressure – One in seven insolvent homeowners now has negative equity, meaning they owe more on their mortgage than their home is worth.
📈 Higher Interest Rates & Inflation – Many households are juggling increased mortgage payments, grocery costs, and credit card balances all at once.
While these challenges are real, it’s never too late to take back control.
How to Get Ahead of Debt & Strengthen Your Financial Position
If you’re relying on credit to stay afloat or worried about upcoming mortgage renewals, now is the time to take action. Here’s how you can start improving your financial health today:
1. Make a Plan for Your Mortgage Renewal
Many homeowners renewing their mortgage in 2024-2025 will face significantly higher rates than they’re used to. If you’re in this situation, planning ahead is key.
🏡 Early Renewal Strategy – Some lenders allow early renewals, locking in today’s rates before they rise further.
🏡 Exploring Alternative Lenders – If your bank’s renewal offer isn’t ideal, other lenders may provide more flexible options.
🏡 Refinancing for Stability – A refinance could help consolidate high-interest debt, giving you one manageable payment at a lower rate.
2. Take Control of High-Interest Debt
If credit card debt is building up, tackling it now can prevent bigger financial challenges later. Consider:
💳 Debt Consolidation – Rolling multiple debts into a single, lower-interest loan or mortgage refinance can ease monthly payments.
💳 Balance Transfers – If used wisely, a low-interest balance transfer credit card can buy time to pay down debt faster.
💳 Budgeting & Spending Adjustments – Tracking expenses and cutting non-essentials can help free up cash to reduce debt.
3. Improve Your Credit Score for Better Loan Options
Your credit score plays a huge role in determining what interest rates you qualify for. To boost it:
📈 Pay all bills on time (even the minimum payment helps).
📈 Keep credit utilization below 30% of your limit.
📈 Avoid opening multiple new credit accounts at once.
4. Work with a Mortgage Professional to Find the Best Solutions
You don’t have to navigate financial stress alone. A mortgage professional can:
🔎 Review your current debt and mortgage situation.
🔎 Identify ways to reduce high-interest payments.
🔎 Find creative mortgage solutions that improve cash flow.
The Bottom Line: It’s Never Too Late to Get Back on Track
No matter how overwhelming things might feel right now, there is always a way forward. Whether it’s a mortgage strategy, debt consolidation, or financial planning, I can help you explore your options and take the next step toward financial stability.
Let’s talk about your situation and build a plan that works for you. 📩 Reach out today!
Melissa Kuczepa, AMPC, Mortgage Agent Level 2
(905) 925-4762
Mortgage Architects #12728
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