You may not get that magazine or the postcard from your Aunt Minnie on vacation in Australia that you were expecting. But the one thing you can always expect to receive in the mail like clockwork is your bills. Especially the ones from your credit card companies.
With interest charges that can range as high as 19 per cent or more, the firms that provide you with all that plastic are more than happy if you fail to pay on time. That's the trap a consumer named John fell into. He lost his job and was forced to rack up charges on his credit card, only to find himself falling further and further into a debt hole he couldn't climb out of.
It's that kind of situation that has NDP leader Jack Layton demanding changes be made in the system. He accuses the federal government of being in bed with the banks and not doing anything to even try to help the Johns of the world. And he wants to see a cap on interest rates at no more than 10 per cent.
"The fact is the banks are taking the middle class and the hard working Canadian family to the cleaners with interest rates that are totally unacceptable", he rails. Layton is furious that some credit card companies now want to charge customers interest before they even start paying their bills. And he insists the Tories have a responsibility to deal with it before more people go for broke.
"It's not fair," he adds. "A very few banks and a very small number of credit cards are available to see the interest rates we're seeing."
Here's a closer look at how you can cut down on your own credit card debt.
Don't buy it if you don't have it
If there's not enough cash in your account, don't buy anything on the card. Remember you're only borrowing with the promise to pay off a debt. It will wind up costing you a lot more if the bill comes due and your funds aren't there.
Make a plan
Realize what your finances are, make a plan to keep them in check, and stick to it.
Pay off the biggest debt cards
The higher the interest, the more you'll pay. So if you only have a certain amount of money to go around, make sure the cheque goes to the one that will cost you the most if you leave it the longest.
Sweat the small stuff
You don't need to owe a lot to see the charges creep up. Get rid of the small amounts as fast as possible and then you can concentrate on bigger needs.
Pay off the minimum
Even a little is better than a lot. The least you can pay is often just a small amount, but it's a start to keep those interest charges from mounting.
Get help
There are several non-profit services that can help you get back in balance. Among them:
Community Credit Counselling Service
Online debt calculator: how much do you really owe?
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