Credit card debt problems: Introduction
Canadians obsess over loyalty programs, which contributes to credit card debt problems. The only way to get more points and rewards, is to keep buying things with the loyalty program credit card.
It’s no surprise since we’re constantly bombarded with advertisements telling us that we can get FREE trips, movies, discounts, merchandise; who could resist such tempting offers? From airlines to fast food chains, it seems that new loyalty programs are cropping up faster than weeds in your garden.
Credit card debt problems: Would you like 10% off your purchase today?
How many times have you gone to make a cash or debit purchase and be told, “If you sign up for our credit card today, we’ll take 10% off your purchase”? Pretty soon you’ll be signed up to a stack of loyalty credit cards trying to accumulate enough points for all of those wonderful things that you’re planning to get free.
Credit card debt problems: How obsessed are Canadians with loyalty credit cards?
- There are 130 million loyalty memberships in Canada. This averages out to more than four memberships per person (2015 study from Colloquy Loyalty Census Canada).
- Canadians are currently hoarding $16 billion worth of points. This is an average of $629 per person (Bond Brand Loyalty).
- The number of loyalty memberships per Canadian has grown 25% since 2013 (Bond Brand Loyalty).
Credit card debt problems: Here are our top 3 risks associated with loyalty credit cards
- The more credit cards you apply for the worse your credit score can become. Every time you apply for credit the lender requests a credit score. Each inquiry places a record on your credit report. Too many inquiries is often associated with higher rates of default.
- You may get sucked into the cycle of buying things because of the amount of points you’ll get. Have a good look at your credit card statement and be honest about how many items you bought because of the points.
- Are you paying your balance in full every month? If not, the high interest you’re paying will more than wipe out any benefit you’re getting. These discounts may be costing you a lot of money and the free stuff could actually be quite expensive.
Credit card debt problems: Are you caught in the loyalty credit card trap?
Is your obsession with accumulating points getting you into credit card debt problems? If so, you need professional help and you need it now. Contact the Ira Smith Team. We can help you get out of credit card debt problems, or any other kind of debt problem. We will put you back on track to debt and stress free living Starting Over, Starting Now. Book an appointment for a free, no obligation consultation today and take the first step to ending the cycle of debt.
