Here it is:
Canadians got a little smarter about their debt, moving it from credit cards to cheaper lines of credit, but the trend still didn’t do anything to stop overall non-mortgage debt from increasing, according to Equifax Canada.So what are Canadians doing? Well according to Equifax, “people are making the same purchases on their credit cards but when the balance comes, they are moving it to their line of credit or [home equity line of credit] which is typically a lower interest rate.”
The claim is that this makes the debt more manageable. There are no signs that Canadians are taking advantage of low interest rates to start paying off overall.
It seems our propensity to consume has certainly not lost its luster.
Despite warnings from the federal government, the Bank of Canada and the lending institutions themselves, that interest rates will be going up, we are not getting the message.
So who is to blame for this ever increasing use of debt?
Well certainly the consumer is ultimately responsible for their own behaviour. For some reason, that I have yet to fathom, as a society we refuse to live with in our means.
When it comes to non-mortgage debt, automobile loans and leases seem to be the main cause of increased debt.
We refuse to adjust our spending so we can actually save money and pay cash for our purchases.
I wonder why that is? Oh yeah, I know why! We are too busy paying interest payments on our debt.
Blame can also be leveled at our government and central bank. They have been warning us time and time again that interest rates are at record lows and will go up. Yet nothing has happened. It is like the little boy who cried wolf so often, no one believed him when it was really happening. We just refuse to believe that interest rates will go up.
But, we are smarter as we are taking on cheaper debt! Debt is still debt!
If you want to change the pattern of being in debt in your life and start to live within your means, check out the Financial Integrity Program.
This program helps you transform your relationship with money-whether your goal is to get out of debt, become financially independent or align your financial decisions with your personal values.
Best part, besides the fact that the program works, is that the FI program is FREE. Just download the FREE guides and get going. There is a Canadian version of the guides as well as a US version.
Do you need additional support? Find a class or find a mentor.
I am convinced that at some point interest rates will go up and those carrying debt will certainly fell the pain. So take action now, while you still have a choice.
Until next time.