Families throughout Canada are increasingly using credit in order to cover their day to day living expenses which has pushed national household debt to $1.3 trillion
The Certified General Accountants Association of Canada has warned consumers today that 85% of households have outstanding debt on their credit card. What is even worse that 21% of Canadian are reaching a point where they can no longer manage their debt load.
49% of families with children under 18 said their debt has increased in the past three years.
The largest proportion of consumer debt is through Lines of Credit and credit cards of which is primarily caused by consumption motives rather than asset accumulation.
The report states that one of four Canadians would not be able to handle an unforeseen expense of $5,000 and one in ten Canadians would not be able to handle an unforeseen cost of $500. I for one can definitely not handle an unforeseen expense of $5,000 and the $500 is a little tight but can be done.
Looking at these numbers it is telling us that 10% of Canadians would find it difficult to cope with an unexpected $500 expense; the situation is not looking good for most.
Laurie Campbell, executive director of Credit Canada a non profit credit counselling organization has noted that Canadians have been living above their means for so long that the savings rate has declined and as such Canadians have been relying on credit to a large degree.
The only way to correct this is to minimize your household expenses and being to save.
Even if you feel you are far gone with your debt and not sure where to turn Credit agencies like Credit Canada could help you turn your life around. It is never too late to pay off your debt and try changing your life around.