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How to Split Up With Your Credit Card Consumer Debt

Canadians have a complicated relationship with credit cards. We love the convenience of being able to whip them out and make purchases, both online and in the store, but we hate the ongoing debt that keeps creeping higher. The good news is that there are steps you can take to finally make a break and let your credit card consumer debt go for greater peace of mind.

If you’re concerned about the amount of non-mortgage debt you’re carrying, you’re in good company.

Manulife Bank’s 2018 Canadian Debt Survey found that 37 per cent of Canadians with debt are always stressed/anxious/worried about their debt.

For those with a lot of debt, 70 per cent are constantly worrying about it.

That’s no way to live. It’s time to end the love/hate relationship with credit cards, and the debt they can create, for good.

Start tracking your spending

Are you wondering why your credit card debt keeps climbing? The answer lies in your spending habits.

Many people aren’t aware of how much they’re spending, especially when it’s consumer debt (i.e. non-essential purchases). A few dollars here, a lunch out there, and a little online shopping can add up, whether you’re consciously doing the math or not.

For many consumers, that’s how convenience results in debt.

Use an app that tracks your spending to see what’s really going on. Once you look at the numbers head-on, you can make different decisions that will help you reduce debt instead of seeing it increase each month.

Commit to using cash

For just one month, commit to using cash for your purchases. Consider it a temporary separation from your plastic.

With cash, you will know exactly how much you have and how much you can spend. Being conscious of your budget will help you think twice about non-essential consumer debt before it accumulates.

If you don’t have a budget to follow, create one before undertaking your cash-only experiment. Identify how much you need for rent, utilities, food and other expenses. You can even put your cash in envelopes for each category so that you’ll have enough for each necessity.

At the end of the month, notice how you feel about the fact that you have avoided adding to your debt load. You will no doubt feel more in control of your finances and be breathing a little easier after taking this break from your credit cards. And that’s a feeling most consumers would like to capture.

And once you’ve captured it, wouldn’t it be nice to continue feeling that way?

Commit to changing your relationship dynamic with credit cards for good by committing to using credit cards in a more limited capacity, such as only when a purchase requires it (think online orders), or when you have the cash to pay off the purchase quickly.

Start tackling your debt

Want to kick your consumer debt for good? One great way to stay in the habit of good financial management is to start seeing the amount of credit card debt you’re carrying diminish.

As the number falls, your peace of mind increases and the stress falls from your shoulders, leaving you happier and more financially confident.

Check out the blog Broke Girl Rich, and her section about destroying debt, with numerous articles full of helpful tips.

You’ll also find lots of great ideas on our blog.

If you find that you can’t create a workable debt reduction plan, consider meeting with a professional. A Licensed Insolvency Trustee (LIT) will be able to advise you on whether consolidating debt without ruining credit is possible and give you options that may make it easier to come up with a plan that works.

Increase your financial literacy

Humans are born with the ability to learn. Unfortunately, we’re not taught everything we need to know, especially when it comes to managing our money.

Often, financial literacy is overlooked in schools, and parents sometimes struggle to teach their kids everything they have to know (or they may be uncomfortable talking about money).

Take your financial literacy into your own hands, and learn everything you can to secure your financial future. Test your financial literacy by taking our financial literacy quiz.

One important lesson to get you started: Just because it’s convenient, doesn’t mean it’s (financially) healthy.

When your goal is to reduce consumer debt, it’s critical to realize that the convenience of credit isn’t worth the stress of increasing debt. Splitting up with your credit cards — or implementing a separation period — puts an end to a roller-coaster relationship with debt. After all, you deserve better.

What are you going to do to finally break up with your credit card debt? Tell us on Twitter. #LeaveDebtBehind #RelationshipWithMoney #FinancialEducation

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