Manage debt between payday 

_{By Bromwich+Smith Staff | 815 words | Reading Time: 4 minutes and 4 seconds | Date: 2022/11/08}

If you are counting pennies in the days leading up to payday, you are not alone. More than 50% of Canadians are living paycheque to paycheque, and that means for many the final days before another payday can be daunting. With the added stress of the holiday season, many may be looking for a quick fix in order to supplement for the upcoming expenses they know they will incur. Options like a line of credit, applying for a payday loan or using credit cards may seem like a simple solution when in reality they come with their own added expenses.

For many, putting holiday expenses on a credit card seems like the easiest option. When we don’t see the money leaving our bank account, or wallet it is easy to overspend and go above any budgets you may have intended to keep. Credit cards come with their own fees, including interest charges if the balance is not paid off by the next billing cycle. Canadians may want to be aware before they pull out their credit cards this holiday season that now credit card fees at the terminal, could be passed along to you. Retailers and service vendors are now able to add the credit card fees back onto your bill which could add an extra 2% of the total purchase price to your bill. Avoid the extra cost by paying with debit, cash or cheque when possible. We know that there are times where your only option is to use credit this holiday season, so staying aware of additional costs will guide you to success.

Many stores will be pushing their own credit cards throughout the holiday season. You may think this is a great way to open more credit and save money at stores you already shop at. Keep in mind that every time you fill in an in store application, the lender looks at your credit. This means your credit could take a hit, and for those who are looking at renewing mortgages, applying for loans, or financing a new vehicle in the near future this could make it that you are no longer eligible for those loans.

Another popular option is a line of credit. You may already have one, or are considering applying for one to assist in holiday expenditures. Keep in mind that there are Pros and Cons to this option. A Line of credit, while the initial inquiry will be a hit against your credit score, If you maintain your payments it will help you build your credit score. The interest rates often vary, so do your research and know what you are committing to pay off before signing up.

One extreme we often see used, are Payday loans. While a quick loan before payday may seem enticing, and the offers of quick cash deposited directly into your account the same day may seem “ too good to pass up” beware the hidden dangers. These seemingly easy loans, often come at extremely high interest rates, and primarily pays off the interest portion of your loan first, before the loan itself gets paid. Meaning if you later decide to pay off the loan in full you will have to pay much more than the original loan was for. Often, these lenders will want to keep you as a client and will continue to offer you enticing offers once your loan is close to completion. Be aware of where your money is going and the full commitment before signing up for any loan, through a Bank or any number of loan vendors.

Be mindful this holiday season, to keep your bank account on track. If you don’t have the necessary funds to purchase extravagant gifts, hold back on your purchases. It is ok to say no this holiday season and to gift yourself a healthy bank account instead. Limit the social gatherings if they are piling up. Don’t feel the pressure to get a new outfit for every holiday function you need to attend, and do not feel pressure to buy extra gifts this year. A handwritten note of appreciation will go further than you know! Set realistic expectations with your children this holiday season. That new gaming system may not be in the cards this year but help them set a realistic plan on how to get there. Maybe they can shovel neighbours’ sidewalks and earn a portion of the money for that big ticket item. By being open and realistic about your finances, you will set your household up for a Happy Holiday season!

No matter what your financial story is, Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page. We want to see you flourish!