Almost half of Canadians who have credit card debt, say they always or often carry an outstanding balance, according to a recent poll.
“If you don’t pay off your balance every month, a credit card is really just another form of debt,” Douglas Hoyes, a bankruptcy trustee with Hoyes, Michalos & Associates Inc. said in a statement. “Let’s call it what it is: a debt card.”
The survey conducted by Harris/Decima for Hoyes, Michalos & Associates also revealed that 1 in 4 say it will take more than a year to pay off their outstanding balance; 1 in 20 report that they will never be able to fully pay off the debt.
Those in debt, however, have considered their options and 56% have thought about cutting expenses while 32% considered increasing their income through a second job or working overtime.
“Cutting expenses is a great start,” Ted Michalos, a bankruptcy trustee, said. “It probably means you’ll use less credit in the future and have more money available to pay down your debt. But if you are one of the 12% of Canadians who can only make the minimum payment each month, cutting expenses may not be enough to deal with the problem. Professional assistance may be required.”
Only 10% of Canadians with a credit card balance or line of credit have considered talking to a credit counsellor and 4% have thought of a debt settlement, the poll reported.
A study released earlier this month by Canadian Imperial Bank of Commerce revealed that Canadians list debt reduction as their main priority in 2013. The poll done for the bank by Harris/Decima showed 17% of respondents selected debt reduction as their top focus — the third year in a row that it has topped the list.
Evidence also shows that consumers are paying down their debt, especially high-interest credit card debt. Credit card debt was down 3.6% from a year earlier, Equifax said in its last quarterly report.