The Problem with Credit Card Debt

According to Equifax Canada, the number of consumers that cannot pay their outstanding credit card bills is rapidly increasing (CBC News). With banks constantly slamming doors in consumer faces, many people find that credit cards seem to be the answer to money problems. Canadian consumers are consistently turning to credit cards to pay for car repairs, home repairs, and even everyday items. The problem with credit card debt is that this type of debt is a lot like quicksand for many consumers.

In the past, most Canadians hardly had any type of credit card debt, but this is all changing due to the current state of the economy. While banks are slashing rates, this hardly ever trickles down to the average consumer that is desperate for a helping hand in the form of a loan. In fact, during this year alone "...there was a 7.3 per cent increase in the national consumer delinquency rate... (CBC News)." This statistic has left a lot of Canadians with a massive amount of debt that seems to have no end.

While some consumers are desperately trying to dig themselves out of credit card debt, other consumers are beginning to realize that there are some alternatives to high interest rate credit card usage. Those that need loans are starting to look towards alternative lending options such as private lenders. Various private lenders are still offering great rates to most consumers - even those that do not have an ideal credit history. In almost every case, this is a far better option than "maxing out" any credit card.

In addition to providing great rates to consumers, these lenders also provide an easy repayment plan. Unlike constant credit card use, a onetime private loan can be repaid simply. Most private lenders work with consumers to come up with repayment terms that both parties can agree upon. After a loan has been paid in its entirety, a borrower is then free from any further payments.

Canadian consumer debt is higher than it ever has been before. While most consumers don't wish to use their credit cards as a form of loan, this often seems like the only available option. As traditional lenders continuously deny loan applications, many consumers have begun to turn towards private lenders. While the Canadian economy is still struggling to get back on its feet, private lenders are as solid as they ever were. This is great news to consumers that want to gain a loan, but don't want to rely upon high interest credit cards to survive.

Related Articles: