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CREDIT CARDS DEBT SOLUTIONS TORONTO: THE LICENSED INSOLVENCY TRUSTEE COMPLETE GUIDE

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credit cards debt

Understanding Credit Cards Debt

It has recently been reported in the Canadian media that Canadians living in the GTA, including Vaughan, Markham, Toronto, Mississauga and York Region are now falling behind in both mortgage payments and other debt payments, including credit cards. If you’re losing sleep over credit cards debt and wondering if another cup of coffee can fix insolvency, you’re in good company. Let me tell you about one potential client who decided to pay down her debt by selling everything but the kitchen sink (that story ends with a suspiciously clean living room and a little more dignity than she expected).

Credit cards debt isn’t just numbers—it’s late-night stress, broken sleep, and more apologizing to your barista than you’d like. But if you’re buried in statements, you need more than the usual advice you’ve heard a dozen times. In this Brandon’s Blog, I’m being real to give you some breathing room.

Before we dive into solutions, let’s be clear on what we’re dealing with. Credit cards debt isn’t just those numbers on your monthly statement—it’s a financial reality that affects millions of Canadians every day.

Definition and Basics

Credit cards debt occurs when you carry a balance from month to month instead of paying off your entire statement balance. Here’s how it works: when you make purchases with your credit card and don’t pay the entire balance by the due date, the remaining amount becomes debt. The credit card company then charges interest on this balance, and if you only make minimum payments, that interest compounds monthly.

In Canada, the average credit card interest rate sits around 19-29% annually. That means if you owe $5,000 and only make minimum payments, you could end up paying thousands more in interest over time. The math is brutal, but understanding it is your first step toward taking control.

Impact on Credit Score

Your credit cards debt directly affects your credit score in several ways. Payment history makes up 35% of your credit score—the biggest factor. Missing payments or making late payments can drop your score significantly. But there’s another sneaky factor: credit utilization.

Credit utilization is how much of your available credit you’re using. If you have a $10,000 limit and owe $7,000, you’re using 70% of your available credit. Experts recommend keeping this below 30%, ideally under 10%. High utilization signals to lenders that you might be financially stretched, which can hurt your score even if you’re making payments on time.

A damaged credit score doesn’t just affect future credit cards—it can impact your ability to get a mortgage, car loan, or even rent an apartment. Some employers and insurance companies also check credit scores.

Legal Consequences: Wage Garnishment and Account Levies

Here’s where things get serious. If you stop making payments entirely, credit card companies won’t just send stern letters forever. In Canada, they can take legal action to collect what you owe.

After several months of non-payment, your account typically gets sent to collections. If collection efforts fail, the creditor can sue you for the debt. If they win (which they usually do), they can obtain a court judgment. With this judgment, they can:

  • Garnish your wages: In Ontario, creditors can take up to 20% of your gross wages directly from your paycheck
  • Freeze your bank accounts: They can obtain a court order to freeze funds in your bank accounts
  • Place liens on property: In some cases, they can put a lien on your home or other assets

The good news? There are legal protections and exemptions. Certain types of income, like social assistance, employment insurance, and pensions, have some protection from garnishment. But don’t wait for it to get this far—there are always better options.

Causes of Credit Cards Debt

Understanding how you got here is crucial for making sure it doesn’t happen again. Let’s break down the main culprits behind credit card debt in Canada.

High Annual Percentage Rates (APR)

Canadian credit card interest rates are among the highest forms of consumer debt. While mortgage rates might be around 5-7%, credit cards typically charge 19-29% annually. Some store cards and cash advance rates can be even higher.

Here’s the kicker: credit card companies make most of their money from interest, not annual fees. They’re betting that you’ll carry a balance, and those high rates ensure they profit handsomely when you do. Even if you think you’ll pay it off quickly, life has a way of getting in the way.

Only Paying the Minimum

This is the credit card company’s favourite scenario. Minimum payments are typically calculated as a small percentage of your balance, often just 2-3%. On a $5,000 balance with a 20% interest rate, your minimum payment might be only $100.

But here’s the trap: most of that payment goes toward interest, not principal. You might pay $80 in interest and only $20 toward your actual debt. At this rate, it would take over 30 years to pay off that $5,000, and you’d pay more than $11,000 in total. The credit card companies designed it this way.

Poor Money Management

Let’s be honest,, without being judgmental, many Canadians never learned proper money management skills. Schools, until very recently, didn’t teach budgeting, and many families don’t discuss finances openly. You’re not alone if you’re figuring this out as you go.

Poor money management often looks like:

  • Not tracking spending or having a budget
  • Using credit cards for regular expenses without a payoff plan
  • Not understanding how interest compounds
  • Making financial decisions based on emotions rather than facts
  • Treating available credit as available money

The good news? These are all learnable skills, and it’s never too late to start.

Unexpected Expenses

Sometimes credit card debt isn’t about poor planning—it’s about life throwing you curveballs. Car repairs, medical expenses, job loss, or family emergencies can force you to rely on credit cards for survival.

In Canada, many people don’t have adequate emergency savings. Statistics show that nearly half of Canadians are within $200 of not being able to pay their bills each month. When unexpected expenses hit, credit cards become the only option. While this might be necessary in the moment, it can quickly spiral into long-term debt problems.

Credit cards debt relief solutions thumbnail showing broken credit cards with red to green gradient background and Canadian maple leaf, representing freedom from debt for Toronto residents
credit cards debt

Consequences of Credit Cards Debt

The impact of credit cards debt goes far beyond just owing money. It affects your entire financial life and, frankly, your overall well-being.

Financial Implications

The most obvious consequence is the financial cost. High interest rates mean you’re paying much more than the original purchase price. But the financial implications go deeper:

Opportunity Cost: Every dollar you pay in credit card interest is a dollar you can’t save, invest, or spend on things you need. If you’re paying $200 monthly in credit card interest, that’s $2,400 per year that could have gone toward building an emergency fund or saving for a down payment.

Reduced Borrowing Power: High credit card balances hurt your debt-to-income ratio, making it harder to qualify for mortgages, car loans, or other credit. Even if you do qualify, you might face higher interest rates because you’re seen as a higher risk.

Limited Financial Flexibility: When a large portion of your income goes to debt payments, you have less room to handle life’s ups and downs. A minor emergency can become a major crisis when you’re already stretched thin.

Compound Effect: Credit card debt can create a vicious cycle. High balances lead to high minimum payments, leaving less money for other expenses, which can lead to more credit card use, which increases balances and minimum payments.

Psychological and Physiological Impacts

Here’s what the financial industry doesn’t always talk about: debt stress is real, and it affects your health in measurable ways.

Mental Health Effects: Persistent worry about money can lead to anxiety and depression. Many Canadians report losing sleep over their finances. The constant stress of juggling payments, avoiding calls from creditors, and feeling trapped can take a serious toll on mental health.

Physical Health Impacts: Chronic financial stress doesn’t just stay in your head. It can cause:

  • Headaches and muscle tension
  • Digestive problems
  • High blood pressure
  • Weakened immune system
  • Sleep disorders

Relationship Strain: Money problems are one of the leading causes of relationship conflicts and divorce in Canada. The stress of debt can affect how you interact with family and friends. Some people become withdrawn, while others become irritable or defensive about spending.

Self-Worth Issues: Many people tie their financial situation to their worth. Debt can lead to feelings of shame, failure, or inadequacy. This emotional burden can make it even harder to take the practical steps needed to address the debt.

Decision Fatigue: Constantly worrying about money and making difficult financial choices can exhaust your mental energy. This can lead to poor decision-making in other areas of life, creating a cycle where stress leads to more problems.

The important thing to remember is that these impacts are real and valid, but they’re also temporary. As you work toward solving your debt problems, you’ll likely notice improvements in these areas too. Your mental and physical health matter just as much as your financial health—they’re all connected.

Credit Cards Debt Confessions from Rock Bottom: Facing the Debt Monster

If you’re staring at your credit card statements, feeling like you’re drowning in debt with no cash in sight, you’re not alone. Canadians everywhere are feeling the squeeze—rising living costs, job uncertainty, and hefty mortgages and car loans have pushed many to the edge. The stress is real, and sleepless nights are a common occurrence. But here’s the truth: the first step out of this mess is financial honesty—with a healthy dose of tough love.

“Being honest with yourself is the bravest first step out of a debt spiral.” — Lesley-Anne Scorgie

Step One: Brutal Honesty About Your Debt

Before you can build any debt management strategy, you need a clear picture of where you stand. Grab whatever works—a spreadsheet, a napkin, your phone—and list every credit card balance, interest rate, and minimum payment. No skipping, no sugarcoating. This is your financial reality check. Research shows that self-assessment and goal-setting are the cornerstones of effective financial planning.

  • List all debts (credit cards, loans, lines of credit)
  • Record each interest rate, especially the high ones
  • Note when the minimum payments are due

High-interest credit card debt can quietly drain your finances the fastest. Identifying which card is costing you the most is key—this is where your focus should go first.

Step Two: Ditch the Self-Blame, Start Planning

It’s easy to spiral into guilt or shame, but that won’t help you pay off a single dollar. Instead, channel that energy into actionable planning. Canadians’ confidence in repaying credit cards debt is slowly rising—45% now expect it will take six months or more to get out from under, down from 51% last year. That’s progress, and it starts with a plan.

Step Three: Pause All Non-Essential Spending

This is the tough part. Cutting out non-essential spending feels scary, but it’s a game-changer. Cancel subscriptions, skip takeout, and avoid impulse buys. Every dollar you save can go toward your minimum payments. Even small changes add up fast. If you’re worried about missing out, remember: this is temporary, and it pays off in the long run.

Step Four: Use Every Tool—Even Your Tax Refund

Over 70% of Canadians receive a tax refund. If you’re one of them, put that money straight toward your highest-interest debt. It’s a quick way to make a dent and boost your momentum. Research indicates that even a small windfall can help you break the cycle of minimum payments and mounting interest rates.

Real Talk: Stress Is Normal, But Action Is Powerful

Stress and sleeplessness are natural side effects of financial strain. Don’t beat yourself up. Instead, focus on what you can control: honest self-assessment, a clear debt management strategy, and a commitment to trimming expenses. Facing your debt monster head-on is tough, but it’s the only way forward. And remember, if you need help, there are professionals and programs ready to support you.

Credit cards debt relief solutions thumbnail showing broken credit cards with red to green gradient background and Canadian maple leaf, representing freedom from debt for Toronto residents
credit cards debt

The Great Cash Hunt: Squeezing Pennies From Stone (and Facebook)

If you’re a Canadian consumer worried about your credit cards debt and wondering where on earth you’ll find extra income, you’re not alone. The good news? There are more ways to squeeze cash from your current situation than you might think—even if it feels like you’re wringing water from a stone.

Unconventional Ways to Boost Cash Flow

Let’s get creative. Research shows that Canadian debt advice often starts with side hustles and decluttering. Have you considered picking up extra shifts at work or dusting off an old side hustle? Babysitting, dog walking, house cleaning, or even personal training can add up quickly. And don’t forget about that tax refund—over 70% of Canadians are owed money by the CRA. Even if you’re late, file those taxes! That refund could be the cash lifeline you need.

  • Extra shifts: Ask your employer for overtime or additional hours
  • Side hustles: Babysitting, dog walking, or cleaning for neighbours
  • Late tax filing: Don’t skip it—your tax refund might surprise you
  • Collect owed money: Follow up on bonuses or debts friends still owe you

Declutter With Abandon

Here’s where things get interesting. If it’s collecting dust, it’s potential debt relief. Look around: that old bike, the bread maker you never use, or the stack of video games from 2012. Platforms like Kijiji and Facebook Marketplace are full of buyers. This potential client sold a rare ’90s bike for double what she paid—sometimes nostalgia pays off in real cash.

“Every forgotten gadget or outgrown coat is a tiny step out of debt.” — Lesley-Anne Scorgie

Don’t underestimate the power of decluttering. Not only does it free up space, but it can also give you a quick cash injection. Research indicates that selling possessions is one of the most common ways Canadians improve cash flow in a pinch.

Strategic Cuts: Kill Non-Essential Spending

Now’s the time to go full-on military with your budget. Cancel unused subscriptions and memberships. Grocery shop with a plan—no more wandering the aisles and tossing random snacks into your cart. Buy only what you need, and aim for zero food waste. If you’re renting or leasing, avoid renewing unless it’s necessary. Every dollar saved is a dollar that can go toward your debt.

  • Subscriptions: Cut anything you don’t use weekly
  • Groceries: Shop with a list, buy in bulk, and cook at home
  • No new leases: Hold off on new car or apartment leases if you can

Remember, cutting recurring costs is more powerful than chasing random coupons. The goal is to redirect every spare dollar toward lowering your credit cards debt. As you chip away at your balances, you’ll start to see progress—and that’s the best motivation of all.

Avalanche, Not Snowball: Smarter Ways to Attack Credit Cards Debt

If you’re staring at a stack of credit card bills and feeling like you’re drowning, you’re not alone. Canadians everywhere are facing the same uphill battle, especially as interest rates stay higher and the cost of living squeezes every last dollar. But there’s a smarter way to dig out—one that doesn’t just chip away at your debt, but helps you save on interest and get ahead faster: the Avalanche Method.

Here’s the real talk: you must always make your minimum payments on every card. That’s non-negotiable. But if you can scrape together even a little extra, whether from a side gig, selling unused stuff, or cutting back on spending, throw every spare dollar at the card with the highest interest rate. That’s your financial enemy number one. This is the heart of the Avalanche Method, and it’s proven to save you more money than the popular “snowball” approach, which focuses on the smallest balance first.

Why does this work? Because interest rates on credit cards debt are brutal. By targeting the highest-rate balance, you slow the snowballing effect of compounding interest. Research shows that Canadians who stick to the Avalanche Method and stay ruthless about not adding new debt can see real progress in as little as 90 days. As Lesley-Anne Scorgie puts it:

“The avalanche method only works if you avoid new debt while attacking existing balances.”

That’s the catch. You have to be relentless. No new purchases, no “just this once” exceptions. If you’re serious about getting out of credit card chaos, every dollar counts—and every new charge sets you back.

But what if you’re still falling behind, even after cutting expenses and boosting your income? Don’t panic. This is when you pick up the phone and call your credit card companies. It might feel intimidating, but remember: they want to get paid. Explain your situation honestly and ask about options like:

  • Lowering your interest rates
  • Waiving late or over-limit fees
  • Setting up a hardship plan

Sometimes, just asking is enough to get a break. And if you hear about debt consolidation or balance transfer offers, listen up. These strategies let you combine your debts—possibly even other loans—into a single payment with a lower interest rate. That means more of your money goes toward the principal, not just the interest. But be careful: applying for too many new credit products can ding your score, and missed payments might make it tough to qualify for the best rates.

If you’re stuck, consider a Debt Management Plan (DMP) through a non-profit credit counselling agency. Research indicates that DMPs can slash your interest rates—sometimes down to zero—and help you pay off debt faster. It’s not a magic fix, but it’s a lifeline for many Canadians feeling overwhelmed by credit card chaos.

Bottom line? The Avalanche Method, paired with honest communication and smart debt management strategies, gives you the best shot at breaking free from high-interest debt. Stay focused, stay ruthless, and remember: you’re not alone in this fight.

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credit cards debt

Last Stop: When DIY Doesn’t Cut It, Call the Credit Cards Debt Pros

Let’s be real—sometimes, no matter how hard you hustle, cut back, or negotiate, your debt just won’t budge. If you’ve spent 90 days throwing everything you’ve got at your credit cards debt and you’re still underwater, it’s time to consider a different approach. Don’t wait for disaster to strike. This is the moment to reach out for professional debt relief—and there’s no shame in that.

Here’s the truth: Licensed insolvency trustees are the debt pros. We’re not here to judge you or scold you for past mistakes. Instead, we offer expert, practical help tailored for Canadians facing tough financial realities. Research shows that specialized support from credit counselling agencies and insolvency trustees can make a world of difference when self-guided strategies just aren’t enough. They’ll walk you through your options, including the possibility of an Ontario consumer proposal—a formal arrangement that lets you pay back a portion of what you owe, and stopping those relentless collection calls in their tracks.

What’s a consumer proposal, exactly? Think of it as a structured alternative to bankruptcy, designed specifically for Canadians who need a lifeline. With a consumer proposal, you work with a licensed insolvency trustee to negotiate a manageable repayment plan with your creditors. This can mean lower monthly payments, frozen interest, and—best of all—peace of mind. It’s not a magic wand, but it’s a real, legal solution that can help you rebuild without the crushing stigma of bankruptcy.

Maybe you’re considering borrowing from family or friends to get by. If you go down this road, treat it like a real loan. Write out an agreement, set a clear repayment schedule, and stick to it. This isn’t just about protecting your relationships—it’s about building trust and accountability as you work toward debt relief.

One thing to keep in mind: if you’ve tried for a consolidation loan and been turned down, don’t keep reapplying in a panic. Each application can ding your credit score, making things even harder. Instead, focus on making progress for a few months, then try again if your situation improves.

Most importantly, know this: asking for expert help isn’t failure—it’s financial self-defence. As Lesley-Anne Scorgie puts it:

“Asking for expert help isn’t failure—it’s financial self-defence.”

So, if you’ve given it your all for 90 days and you’re still stuck, don’t let shame or fear hold you back. Connect with a licensed insolvency trustee or a reputable credit counselling agency. They’ll help you explore every option, from consumer proposals to debt management plans, and guide you toward a future where your money—and your life—are back under your control.

Credit Cards Debt: Conclusion

You’re not alone in this. There’s a path forward, and it starts with reaching out for the right kind of help. Take that step—you deserve it. If you’re a GTA resident dealing with overwhelming debt, don’t wait for your credit situation to get worse. As a licensed insolvency trustee serving Toronto, Mississauga, Brampton, Markham, and surrounding areas, I’m here to help you understand your options.

Free consultation available:

  • No obligation to proceed
  • Complete review of your debt and credit situation
  • Clear explanation of how debt solutions affect your Equifax credit score
  • Practical next steps you can take immediately

Remember: Your current financial situation doesn’t define your future. With the right help and information, you can overcome both debt challenges and credit score problems.

As a licensed insolvency trustee serving the Greater Toronto Area, I encourage consumers and business owners to view financial difficulties not as failures but as challenges that can be addressed with proper guidance. By understanding the warning signs of insolvency and seeking professional advice early, many people and businesses can find a path forward – whether through restructuring, strategic changes, or in some cases, an orderly wind-down that protects their future opportunities.

Remember: The earlier you seek help for company insolvency concerns, the more options you’ll have.

If you or someone you know is struggling with too much debt, remember that the financial restructuring process, while complex, offers viable solutions with the right guidance. As a licensed insolvency trustee serving the Greater Toronto Area, I help entrepreneurs understand their options and find a path forward during financial challenges.

At the Ira Smith Team, we understand the financial and emotional components of debt struggles. We’ve seen how traditional approaches often fall short in today’s economic environment, so we focus on modern debt relief options that can help you avoid bankruptcy while still achieving financial freedom.

The stress of financial challenges can be overwhelming. We take the time to understand your unique situation and develop customized strategies that address both your financial needs and emotional well-being. There’s no “one-size-fits-all” approach here—your financial solution should be as unique as the challenges you’re facing.

If any of this sounds familiar and you’re serious about finding a solution, reach out to the Ira Smith Trustee & Receiver Inc. team today for a free consultation. We’re committed to helping you or your company get back on the road to healthy, stress-free operations and recover from financial difficulties. Starting Over, Starting Now.

The information provided in this blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc., and any contributors do not assume any liability for any loss or damage.

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MAXED OUT CREDIT? YOU NEED TO KNOW HOW TO INCREASE CREDIT SCORE: OUR 13 INTRIGUING TIPS TO IMPROVE YOUR CREDIT SCORE

how to increase credit score
how to increase credit score

Our mission includes helping you know how to increase credit score with our free online course

The objective of this Brandon’s Blog is to furnish readers with comprehensive insights on improving their credit rating, alongside introducing them to our complimentary no-cost e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score”. This user-friendly course provides a definitive guide on increasing your credit score, thereby paving the way for better financial prospects. The brief video above describes the course and how you can access it.

This Brandon’s Blog provides highlights common problems faced by those with low credit scores, including being declined for credit or having to pay high-interest rates. I also provide valuable tips on how to increase credit score. The focus is primarily on the significance of maintaining a good credit score in order to get approval for reasonably priced loans, mortgages, or credit cards.

Explanation of maxed-out credit: Know how to increase credit score

Maxed-out credit happens when an individual has reached their credit limit and is unable to borrow any more and make further purchases. It results in high-interest rates, missed payments, and damaged credit scores. However, there are effective ways to increase your credit score and eliminate debt. This Brandon’s Blog, combined with our free e-learning course, delivers easy-to-understand strategies and expert counsel to equip consumers with everything they need to know to improve their credit scores to unlock better financial prospects.

Through the knowledge I am sharing, individuals can successfully navigate the complex world of credit ratings and experience marked improvements in their daily lives. By embracing sound fiscal practices, one can effectively manage their money, avoid bankruptcies or consumer proposals, and ultimately earn a more favourable financial life. So take control of your financial situation today and with our help, begin your journey towards a more stable and prosperous financial future with our “How to Increase Credit Score: How To Improve Your Canadian Credit Score”.

how to increase credit score
how to increase credit score

Importance of improving credit score: Know how to increase credit score

In today’s world, a good credit score functions as the cornerstone for getting financial freedom. For people that have grappled with debt, insolvency, bankruptcy or consumer proposals, improving their credit rating may look like an overwhelming obstacle. Yet, with the specific devices and insights we are supplying to you, any person will be able to take control of their very own financial life heading in the direction of a brighter tomorrow.

This is exactly why we have created “How to Increase Credit Score: How To Improve Your Canadian Credit Score“. Our recommendations and our tried-and-tested techniques will move you toward a better credit score, eventually unlocking excellent loan and mortgage opportunities from Canadian lenders, and enabling you to accomplish your financial goals. Take control of your future and bid farewell to higher interest rates and declined credit applications by going through our “How to Increase Credit Score: How To Improve Your Canadian Credit Score” today.

Description of what a credit score is, how it is determined and then how to increase credit score

A person’s credit worthiness is represented by a numerical score known as the credit score. This score is derived from various financial information such as payment history, credit utilization rates, length of credit history, types of credit used, and new credit inquiries.

Credit scores range from 300 to 900, where a higher score is indicative of better credit history and financial stability. The credit report, maintained by Canada’s two credit reporting agencies, Equifax Canada and TransUnion Canada (Equifax/TransUnion), is the source of credit ratings and it is what the Canadian banks will look at.

how to increase credit score
how to increase credit score

Importance of knowing your credit score and how to increase credit score

Maintaining a good credit score is a key factor in today’s financial landscape, irrespective of whether you are a student, a young professional, a business owner or are retired. Knowing your credit score is important so that you can stay informed on what others think of your creditworthiness and financial standing. Sometimes adverse information may find its way into your credit report as an error. By knowing what your credit report says, you will be able to prove any errors that should be eliminated which produces a lower credit score than what you are entitled to. It is important to have any errors fixed to avoid any negative impact on any assessment of your creditworthiness.

A low credit score can lead to being denied for credit, higher interest rates, and unfavourable loan terms from Canadian lenders. It is essential to maintain a high credit score as it paves the way for obtaining the best possible deals on loans and credit card products from financial institutions at the most favourable rates. Therefore, it is crucial to keep a tab on the various financial factors that contribute to your credit score to ensure a sound financial standing.

That is why we developed our complimentary no-cost e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score”. To teach you how to improve your credit score.

Knowing how to obtain your free credit report is the 1st step in how to increase credit score

Maintaining vigilance over your credit report is a prudent method for verifying the precision of your credit history and score, both of which serve as significant benchmarks of your monetary stability. Fortunately, procuring a complimentary credit report has become effortless. It is your lawful right to receive an annual free credit report from each of the two Canadian credit bureaus.

Submit a formal request for your credit report via their digital portal or through the Canadian postal service. When you get it, meticulously examine it to identify any inconsistencies or inaccuracies that may be impeding your creditworthiness.

If you find yourself struggling with debt, don’t despair. Our complimentary e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score” can provide you with valuable insights and practical strategies to enhance your credit score and overcome financial setbacks. You can trust us to help you take control of your financial future today.

how to increase credit score
how to increase credit score

Common credit score issues that create lower credit scores: How to increase credit score

A low credit score can present significant obstacles, particularly when making significant purchases on credit or seeking loans. Although there are many parts contributing to an individual’s credit score, certain concerns are regularly associated with reduced scores.

A number of widespread credit score difficulties can bring about lower scores, such as:

  • Late payments: Not making your payments on time will have a major negative impact on your credit score, whether we are talking about credit cards, loans or lines of credit. Late payments reflect badly on your credit report and can significantly affect your overall score. Paying your debts on time, and not just your minimum payment, has a positive impact on your credit rating.
  • High credit utilization: A higher credit utilization rate will adversely impact your credit score. Financial institutions prioritize borrowers who exhibit responsible credit management practices; hence, maintaining a low credit utilization ratio (usually below 30%) is fundamental.
  • Errors on your credit bureau report: As already stated, inaccuracies on a credit report, ranging from erroneous personal details to accounts that are not legitimately attributable, can harm your credit rating. To safeguard against such potential pitfalls, it is imperative to maintain an annual review of your credit report and promptly challenge, with evidence, any inaccuracies that may be encountered.
  • Defaulting on a loan: Be it a mortgage or an automobile loan, defaulting will lead to a deterioration in your creditworthiness. Therefore, you have to make sure when you are approved for a loan that you can afford the monthly payments and meet all other repayment terms. This is of prime importance.
  • Applying for too much credit: Requesting too much credit can have negative effects on your credit rating. Potential lenders, and especially credit card companies, may interpret this as a sign of your nervousness over your financial hardship and a greater chance of you eventually defaulting on the loan. As such, you should exercise moderation when applying for credit. Moderation and realism is the key to maintaining a healthy credit profile.
  • Accounts in collection: Having accounts in collection leads to a decrease in your credit score. This is because you have now shown that you cannot handle credit responsibly. It is imperative that you promptly settle any outstanding amounts and work with the creditor or its appointed collection agency to eliminate that account from your credit report. If you don’t, there will be a negative impact on your creditworthiness.
  • “Hard credit check” versus “soft credit checks”: See the next section for this discussion.

By steering clear of these typical credit score complications, you can keep a good credit score and heighten the probability of obtaining credit approval in the foreseeable future.

“Hard hits” versus “soft hits”: Know how to increase credit score

The first issue is having too many hard inquiries on your credit report. These hard inquiries occur when lenders pull your credit report and do a credit score check as the first step in determining if you’re going to be approved for a loan or other credit product you applied for.

What are hard inquiries on your credit report?

When seeking new credit such as a loan, credit card or mortgage, hard inquiries are initiated on your credit report. A hard inquiry is a request for a copy of your credit report and it remains on your credit report for two years. However, it only affects your credit score for one year.

What are soft inquiries on your credit report?

A soft inquiry is an informational check of your credit that does not impact your credit score. Soft inquiries appear when you or an authorized user view your own credit report, or when a business checks your credit for pre-approved offers or account reviews.

Soft inquiries are also known as “soft pulls” because they do not impact your score, unlike hard inquiries which do.

how to increase credit score
how to increase credit score

13 tips on how to address these issues and how to increase credit score in Canada

We understand that managing finances can be challenging, especially when you are maxed out on your credit and can’t repay the debt. You may be feeling overwhelmed and unsure of what to do next, but don’t worry, we are here to help.

Developing sound credit practices is the cornerstone of financial literacy. Learning and regularly practicing such practices is crucial as it will improve your financial outlook. By timely payment of bills, responsible use of credit cards, and staying on top of what is in your credit report, you can improve your credit score and secure a path to financial triumph.

This, in turn, can enable you to establish a robust credit history, thereby qualifying you for lower interest rates on all credit products. Sticking with the sound tips indicated below, it will grant you access to more advantageous lending options that may not be easily available to the masses.

Developing sound credit practices means unfailing commitment, meticulous planning, and unwavering attention to detail. However, you will reap the benefits because these tips and activities will help you achieve your long-term financial goals and establish a solid foundation for your and your family’s financial future.

Here are our 13 tips on how to address these issues and how to increase credit score in Canada:

  1. Assessing your debt situation

    You have to start by truthfully analyzing your whole financial status to successfully manage your financial debt. This involves meticulously gathering all the information from charge card statements, and loan agreements, and identifying all other outstanding debts to calculate the total amount owed, the individual interest rates you are being charged by product, and all your monthly payments. Only by doing so, can you after that begin to create a realistic plan to pay off your financial debts in a timely and efficient way.

  2. Creating a budget plan

    Now that you have collected all of your debt information, it’s time to develop a household budget that includes all incomes as well as expenses. Ensure you include all of your fixed expenditures like rent or mortgage payments, utilities and vehicle loan payments. Then you need to list all of your variable costs like food and entertainment.

    Once you have a clear idea of your expenditures, compute your income on a monthly basis and subtract your expenses from it. This will show you where you need to cut down on expenses and/or take on a side gig to raise your income.

    Keep in mind that you cannot be spending more than you earn in any month. Ideally, you want to spend less each month than your monthly income, so that you can then have money to dedicate to paying down your debts and building up an emergency savings fund.

    Incidentally, do not neglect to include the income tax you need to pay on your income, broken down into a regular monthly cost. Include that amount as a monthly expense also.

  3. Contacting your creditors

    It’s crucial to reach out to your creditors promptly if you’re having trouble keeping up with your debt payments. You might find that they’re receptive to collaborating with you on a customized repayment scheme that meets your financial capabilities. By disregarding your debts, you’ll only exacerbate the problem, which could lead to late charges, sanctions, and a negative impact on your credit report.

    Please keep in mind that unless you have first done the two steps listed above, you will not have a good understanding of what kind of accommodation you need to ask each creditor for. If you go in well-prepared knowing all of your numbers, you will significantly increase your chances of success in these negotiations.

  4. Explore debt consolidation

    If you’re dealing with numerous debts, you could want to take into consideration debt loan consolidation. It’s a viable option where you can secure a single loan at a lower rate of interest than the weighted average interest rate from every one of your debts that you’re currently paying.

    You then use the funds from this new loan to fully pay off or otherwise settle all your other debts. As a result, you will then only have one debt to concentrate on, with a reduced month-to-month repayment. This will certainly assist you handle your debts successfully and reduce the amount of interest you’re paying. This also saves you cash that you can then put toward building up your emergency fund and savings.

  5. Reduce credit utilization

    Decreasing credit utilization is an essential part of increasing your credit score. Firstly, take stock of your existing credit usage, and attempt to pay off the balances on the highest-interest accounts first. Think about settling your debts with a debt consolidation loan or a zero-percent balance transfer credit card. You can enjoy a healthy financial future by reducing your credit card balances and limiting how many times you apply for credit within a year. Enhance your credit score by lowering your credit utilization ratio.

  6. Pay your bills on time

    Always paying your bills on time is key to maintaining your credit rating in good shape. A constant history of timely repayments will help you build a higher credit score and which improves the look of your credit report. It is critical to keep your bills paid on time to show a positive payment history and not have a damaging influence on your credit history.

  7. Use Your Credit Responsibly

    Avoid maxing out your charge cards and try to keep your credit utilization rate low as previously stated. It will help you keep a great credit rating or improve your existing one by showing lenders that you are a responsible borrower.

  8. Monitor Your Credit Report

    Maintaining an accurate credit report and safeguarding against identity theft are critical financial practices. You are legally entitled to get from the Canadian credit reporting bureaus a complimentary copy of your credit report annually.

    Thoroughly review it so that you can detect any fraudulent activities or errors that could result in severe damage to your credit rating. Hopefully, there are not, but you must remain alert and well-informed about your credit standing to ensure your financial well-being.

  9. Limit New Credit Applications

    It is important for you to remember that each credit application you make reduces your credit score. Therefore, you must be cautious and limit the number of credit applications you make. You should only try to get new credit when it is absolutely needed. This advice also goes for applying for a credit limit increase of an existing credit product.

  10. Developing a Strong Credit Profile

    Having no or very little credit history can pose a huge problem when you make a credit application. Your credit file does not have enough information in it to show that you can handle credit responsibly. It is recommended to begin developing a positive credit history early on in your adult life. You should consider alternatives such as getting a secured credit card account or a 1-year term personal loan that requires you to make regular monthly payments. If you make your payments on time, you will begin establishing an excellent credit track record which brings about a good credit score.

    A word of caution. As you are just starting out, make sure that you only set reasonable loan or credit card limits so that you can afford the monthly payments to repay what you owe on the credit accounts during the period of time allowed by the lender.

  11. Explore professional credit counselling

    Individuals grappling with financial challenges may find it advantageous to seek the expertise of a seasoned credit counsellor. This prudent move can afford them a series of invaluable benefits, all of which serve to bolster their financial literacy and improve their overall monetary management. Prominent advantages of credit counselling include, but are not limited to:

    • Enhanced Debt Management: Credit counselling can help individuals struggling with debt to manage their finances better. The counsellors can offer valuable advice on debt repayment strategies, budgeting, and managing the debt load effectively.
    • Financial literacy: The acquisition of financial knowledge is essential for individuals to navigate the complexities of financial management with success. To this end, credit counsellors offer an imperative service by imparting essential financial education that equips individuals with the necessary skills to cultivate sound financial habits, make informed financial decisions, and preemptively avoid potential financial obstacles.
    • Improved credit score: Credit counselling services can provide individuals with the valuable expertise necessary to improve their credit scores. People who go through credit counselling obtain the tools necessary to practice the habit of responsible financial management which over time improves their credit scores.
    • Emotional Support: The credit counsellor can help people through the rough patches of anxiety and worry about their financial situation until they start feeling better about themselves and their improving financial situation.

  12. Speak to a licensed insolvency trustee

    There are benefits to having a no-cost consultation with a Canadian licensed insolvency trustee if you are facing financial difficulty. Here are a few:

      • Expert advice
      • Protection from creditors
      • Debt relief
      • Guidance through the process
      • Financial education

    Overall, speaking with a Canadian licensed insolvency trustee can help you take control of your finances and achieve a fresh start.

  13. Watch the video at the top of this Brandon’s Blog

You will find out how to access our no-cost e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score”.

Conclusion: How to increase credit score

Managing your debts can be challenging, but with the right plan in place, it’s possible to get back on track. Remember to assess your debt situation, create a budget plan, contact your creditors, explore debt consolidation, and consider bankruptcy only as a last resort option. With these steps, you can take control of your finances and work towards a debt-free future. Having a maxed-out credit can be stressful and overwhelming. However, it is also an opportunity to take control of your finances and work towards improving your credit score.

With our complimentary no-cost e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score”, you can learn practical strategies and expert advice on how to boost your credit score and secure better financial opportunities. By following our simple steps, you can finally put an end to being denied credit or paying high-interest rates. With dedication and perseverance, you can unlock financial freedom and achieve your goals. So, don’t wait any longer; start your journey towards a healthier credit score today and join countless individuals who have already benefited from our guide.

I hope you enjoyed this how to increase credit score Brandon’s Blog.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy proceedings. We can get you debt relief now.

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

CLICK THE PICTURE BELOW TO GET OUR COMPLIMENTARY NO-COST E-LEARNING MODULE, “HOW TO INCREASE CREDIT SCORE: HOW TO IMPROVE YOUR CANADIAN CREDIT SCORE”

how to increase credit score
how to increase credit score
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BUY NOW PAY LATER IN CANADA: 4 PRACTICAL THINGS TO KNOW BEFORE GETTING A BUY NOW PAY LATER PLAN

As the COVID-19 pandemic continues, we hope that you, your family, and your friends are safe, healthy, and secure. Ira Smith Trustee & Receiver Inc. is fully operational, and both Ira and Brandon Smith are readily available for phone or video consultations.

Buy now pay later in Canada plans: Introduction

The holiday shopping season is over. Your bills have arrived. A buy now pay later in Canada program attracted many Canadians. In Canada, people may not realize that they are borrowing money to pay for their purchase when they opt for a buy now pay later in Canada plan. Such a financial product is also known as a BNPL, instalment loan, or retail credit services. A BNPL is a credit product that is best suited for purchases of large-ticket items such as furniture, televisions, and home appliances. This kind of payment option is available both from brick and mortar retailers and for online shopping too.

The buy now pay later in Canada industry is pumping out millions of dollars, as many people rush to buy big-ticket items. However, many people can’t afford to pay for these items, and the buy now pay later in Canada industry is swallowing these people up. We are talking about people who have a bad credit score, unpaid bills, could not pass credit checks and just plain don’t have the money.

In this Brandon Blog, I discuss how for some people a buy now pay later in Canada plan might be too good to be true as there are hidden risks.

buy now pay later in canada

What is a buy now pay later in Canada plan?

The buy now pay later in Canada plan is popular with consumers who don’t qualify for a credit card or other financing, but who would still like to purchase a large item and spread out the payments. Customers can make purchases and pay them back at a future date, often interest-free, using this short-term financing vehicle.

Examples of BNPL agreements include:

  • an agreement where the purchaser commits to purchase a product or service from the retailer;
  • the retailer’s agreement with a lender to finance purchases;
  • the customer’s agreement with a financial service provider which usually specifies:
    • The amount of each monthly payment.
    • Payment frequency.
    • The number of payments.
    • Rate of interest. If there is an interest-free period, the rate of interest upon default of making either a monthly payment or paying off the balance on time.
    • Any fees.
    • The payment method.

Retailers can obtain BNPLs from a variety of financial service providers. This type of financing option is available from financial institutions, such as banks, credit unions, caisses populaires, financing companies and money services businesses, including fintech.

buy now pay later in canada

Buy now pay later in Canada plan: Here are some things to consider before choosing to use one

With a buy now pay later in Canada plan, you can pay for nearly any large household item such as appliances, furniture, a furnace, or a central air conditioning system. BNPLs have their advantages for some people. These plans have the risk of getting you into uncontrollable debt very (very) quickly.

Pros of buy now pay later in Canada plans

Buy now pay later in Canada programs offer consumers some benefits. No fees, no interest, and you know that unlike with a credit card, the full amount of your purchase will not hit you all at once. Retailers bear the fee involved.

A soft credit inquiry is all that is required to approve a buy now, pay later loan. A soft credit check with the major credit bureaus does not impact your credit score. Furthermore, BNPLs have the advantage of being different from traditional layaways. Layaway plans entail making a down payment to the seller and paying a small amount each week for the balance. Only after you have fully paid for the item can you take it out of the store. A BNPL allows you to leave with your item or have it delivered so that you can use it immediately without paying the entire purchase price.

A buy now pay later in Canada plan allows consumers to obtain instant gratification.

Cons of buy now, pay later plans

A BNPL is ideal for those who can make all the payments on time and pay the outstanding balance in full on the due date. It is also good for those who have a steady income and the discipline to make sure the entire amount is paid off at the end of the interest-free period. There are unfortunately more cons than pros to a buy now pay later in Canada plan.

They are:

  • Depending on your payment history, as well as the policies of the retailer, financial tech companies set limits on the amounts you can defer.
  • It’s convenient to spread payments out, however, there are fewer protections than if you used a credit card.
  • BNPL programs also present the risk that those seemingly affordable payments may lead you to splurge.
  • The BNPL statement is strangely designed. According to one buy now pay later in Canada study, two-thirds of those who fell behind said they simply forgot about the payments, not that they did not have the cash.
  • In lending, a company wants to make sure the consumer can handle the new account and will be able to repay it. An unpaid buy now, pay later balance will be sent to collections, damaging your credit.
  • By transforming one big price tag into an array of smaller payments, deferred payment plans in BNPLs lower sticker shock. Impulse spending goes up as a result.
  • This can lead to a rapid accumulation of debt. You may forget how much you need to set aside for your BNPL payments if you’re not tracking your expenses and budgeting.
  • Not all BNPLs require regular payments. They instead require the sum to be paid by a certain date in the future (usually 6-12 months from the time of purchase). Notices, reminders, and invoices may not be sent until almost the end of the period. Once the BPNL due date passes, the full sum becomes due, plus interest and late payment charges and fees for missed payments.buy now pay later in canada

Buy now pay later in Canada: 8 Options when you buy now and can’t pay later

During the interest-free period, you can spread out large expenses over a period of time, but you should be ready to pay the full balance by the due date. If you cannot pay off the balance on your account after the interest-free period expires, what are your options? Unemployment or a family emergency may have changed your financial situation due to circumstances beyond your control.

Here are some options you can consider:

  1. Speak with your lender. There may be a financial hardship program that you can utilize, enabling you to get more deferrals and thus more breathing room. Changing the due dates may also be an option.
  2. Take a look at your finances and household budget to see where opportunities exist. Focus on saving money in other areas while prioritizing essentials like housing, food, utilities, and medicine.
  3. Let go of the purchased item. You might be able to return the item to the merchant for a refund. Although some buy now, pay later companies do not refund interest payments, you may be able to get your money back. During the refund process, payments may still be due. Consider selling the item to recoup some of the money if a merchant won’t accept a return. Online marketplaces, apps or websites may help you find a buyer. It’s important to understand the terms before listing an item on an online marketplace since they may take a cut of the sale.
  4. Get a side gig to make money. Increasing your work hours or earning supplemental income through a side job, such as driving for a rideshare company or delivery service, can help you pay down your buy now, pay later debt faster.
  5. Perhaps you can qualify for a debt consolidation personal loan if your credit score is good enough in order to reduce the interest charges on all high-interest rate debts, such as credit card debt. The cash you free up can be used to pay off the BNPL.
  6. Contact a non-profit credit counselling agency for free help. Avoid going to a for-profit debt relief company.
  7. To discuss your realistic options, contact a licensed insolvency trustee for a no-cost consultation.buy now pay later in canada

Buy now pay later in Canada plan: Summary

In summary, you may find that getting a buy now pay later in Canada plan is a good option for you and your financial situation. A buy now pay later plan could help you with those unforeseen expenses, such as when an old furnace breaks down for good. Just make sure you understand everything involved in the buy now pay later plan before signing up, and you can see yourself being able to be debt-free when the interest-free period ends.

I hope you found this buy now pay later in Canada Brandon Blog informative. Although nothing is guaranteed, managing your debt in a way that will allow you to be able to afford it, will lead to your financial success. It will also give you the best shot at having a financially stress-free life.

Are you or your company in financial distress and a debt crisis? Are you embroiled in costly litigation or a crushing debt load and need a time out in order to restructure? Do you not have adequate funds to pay your financial obligations as they come due? Are you worried about what will happen to you? Do you need to search out what your debt relief options and realistic debt relief solutions for your family debt are? Is your company in financial hot water?

Call the Ira Smith Team today. We have decades and generations of experience assisting people looking for life-changing debt solutions through a debt settlement plan and AVOID the bankruptcy process.

As licensed insolvency professionals, we are the only people accredited, acknowledged and supervised by the federal government to provide insolvency advice and to implement approaches to help you remain out of personal bankruptcy while eliminating your debts. A consumer proposal is a Government of Canada-approved debt settlement plan to do that. It is an alternative to bankruptcy. We will help you decide on what is best for you between a consumer proposal vs bankruptcy.

Call the Ira Smith Team today so you can eliminate the stress, anxiety, and pain from your life that your financial problems have caused. With the one-of-a-kind roadmap, we develop just for you, we will immediately return you right into a healthy balanced problem-free life.

You can have a no-cost analysis so we can help you fix your troubles.

Call the Ira Smith Team today. This will allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

buy now pay later in canada

As the COVID-19 pandemic continues, we hope that you, your family, and your friends are safe, healthy, and secure. Ira Smith Trustee & Receiver Inc. is fully operational, and both Ira and Brandon Smith are readily available for phone or video consultations.

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3 TOP WAYS TO SUCCEED IN CREDIT REPAIR USING A CREDIT CARD FOR REBUILDING CREDIT

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic. Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Credit card for rebuilding credit: Introduction

Money mistakes in the past can negatively impact your credit score and your ability to qualify for a loan or obtain a good interest rate. Fortunately, there is hope. Bad credit scores can be improved in Canada by the use of perseverance and some time. You might even qualify for a credit card for rebuilding credit in Canada.

This Brandon Blog shows you how to take control of your finances, including learning how to use a credit card for rebuilding credit to improve your credit rating.

credit card for rebuilding credit
credit card for rebuilding credit

A credit card for rebuilding credit for people with bad credit is not your first step

Getting a copy of your credit report is the best way to determine which areas need improvement when it comes to repairing your credit. How many late or missed payments have you had in the past? The credit bureaus can report past due utility payments, outstanding cell phone bills, and old parking tickets. Have you exceeded your debt utilization ratio? Did you experience bankruptcy in your past?

Could your credit report be inaccurate? This is something that needs to be brought to the creditor’s attention so that they can fix the problem and revise their reporting. As an alternative, you can provide proof to the two credit reporting agencies in Canada, so that each can correct the error.

credit card for rebuilding credit
credit card for rebuilding credit

A credit card for rebuilding credit Canada is not your next step either

Now that you know your debts need to be addressed, you need to figure out how to get your payments in order. You need to develop smart spending and saving habits to rebuild your credit score. One of the best ways to do this is to create a budget that reflects your income and expenditures. In my Brandon Blog, I have written extensively about the importance of household budgets. Budgets are essentially a plan for how you will spend your money. Following a budget will help you with having normal and current payment activity.

Getting comfortable with not overspending and living within your means should become a habit. You don’t have to give up every nice dinner or outing just because you have a budget, but you do have to be aware of how much income you have available to spend and save after taxes. This will allow you to be able to make all necessary payments on time.

Next, you must establish better credit history through consistent payments. Your payment history is the most important factor in determining your credit score, so if you’ve fallen behind on your payments – or haven’t been paying on time – your credit situation is unlikely to improve until you catch up on your accounts. Without improving on this, you cannot fix a poor credit score. Spoiler alert – making only the minimum payment each month against your regular credit card is not keeping current on that debt.

If you cannot pay your overdue accounts right now, call up your creditors. Maybe you can negotiate a special repayment plan that fits your budget. Cut your debt as much as possible. Credit utilization ratios are very important. If your various types of credit, such as credit card balance, line of credit, or overdraft are used more than three-quarters of your available credit, that will bring down your credit score.

With time, patience, and financial discipline, building a better credit history and credit score – even rebuilding credit after bankruptcy – can be done. In the beginning, you may need to only use cash, and preferably not your debit card, for all of your necessary everyday purchases. Put your credit cards away to avoid temptation. Knowing that if you do not follow your budget you will run out of money is a strong motivation to stay on track when you only take out the amount of cash your budget says you can afford to spend.

One of the first steps to rebuilding credit with a credit card might be to lock each traditional credit card away and not use them!

credit card for rebuilding credit
credit card for rebuilding credit

Prepaid Credit Cards vs. Secured Credit Cards: What’s the Difference?

Prepaid cards are sold at many retail locations, such as grocery stores and pharmacies. A service fee is charged when you load money onto the card and when you use it. So not all the money you load onto the card is applied to your purchases. Whenever you do buy something with this kind of credit card, the dollar amount of your purchase is deducted from your cash balance.

You can still get a prepaid credit card without having a good credit score. That is because by getting this type of card, you are not applying for or getting credit from anyone. To load it, you use your own money. To put money onto a prepaid card you can: (i) transfer money from your bank account onto the card; or (ii) give cash to the clerk who will add it to the card at the store that sold it to you.

Prepaid cards are not credit cards in the traditional sense, so they won’t help you build credit or repair credit. In the same vein, it is not a credit card for rebuilding credit.

One of the requirements of a secured credit card is that you need to pay a cash deposit. Once the deposit is made, the credit limit is equal to the amount of the deposit. The security deposit that you pay is collateral held onto by the credit card issuer in return for the credit they are extending to you. If you don’t repay your balance on time, the credit card company can use this security deposit to pay off your debt. Once you have paid the security deposit, you can use the secured credit card.

The normal size of payment of security deposit typically varies from $500 to $10,000. You can get a secured charge card if you do not get approved for a standard unsecured credit card. Those with a poor credit history looking for a credit card for rebuilding credit will certainly find a charge card of this kind beneficial. Secured cards do not require a credit check because the financial institution is protected by the down payment. Consequently, you are practically certain to be authorized.

You will boost your credit rating as you make purchases and repay your full balance outstanding every month with this type of card. It is because the issuer of the secured credit card is really giving you credit. Your balances as well as payment history are reported frequently to the two credit bureaus in Canada. You can enhance your credit score over time by making your full regular monthly payments when due. Any individual aiming to use a credit card for rebuilding credit should seriously look into getting a secured credit card.

credit card for rebuilding credit
credit card for rebuilding credit

Credit card for rebuilding credit: Secured credit cards vs. unsecured credit cards

There are differences between secured cards and unsecured credit cards. An unsecured credit card is a routine charge card that can be made use of day-to-day as much as the credit limit allows. The issuer of these types of traditional charge cards makes a hard credit check inquiry right into your credit report when you apply for one. An unsecured card does not need a down payment. An unsecured charge card normally has a higher credit limit, and some credit card companies offer with their unsecured cards benefits like cashback, price protection, a better interest rate on purchases or travel points.

You can ask if your secured card can be turned into an unsecured one after an amount of time (and your security deposit returned). I would say that a reasonable time period would be six months to a year of making consistent payments on time as well as staying within your credit line. You have to demonstrate that you can handle credit properly.

Credit cards, both secured and unsecured, report your activity to the credit bureaus. If you use the card responsibly, you can build or rebuild your credit. Look around carefully to find the right credit card for your financial and credit score situation that will help you rebuild your credit. Secured, unsecured, low-interest rate, travel benefits and even guaranteed approval credit cards are available from many financial institutions in Canada.

Picking the ideal credit card for rebuilding credit is really crucial. While some bank cards have an annual cost, others do not. You must constantly check out the fine print in the contract when picking a credit card. I wish you great success in your financial journey.

credit card for rebuilding credit
credit card for rebuilding credit

Credit card for rebuilding credit: Summary

I hope you found this credit card for rebuilding credit Brandon Blog post informative. Are you worried because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option? Your situation may be so dire that a redone budget and a secured credit card may not be enough of an answer. If it is too much debt for any reason, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Even though we are licensed insolvency trustees, we have found that not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation. We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

credit card for rebuilding credit
credit card for rebuilding credit

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic. Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Call a Trustee Now!