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Fear of recession and BOC Overnight interest rates above 3%

Dated: July 26 2022

Views: 69

When you fall behind on your payments, you may risk losing your assets --for example, your car or home. A larger amount of debt will also lower your credit score, which can make it more difficult to get new credit in the future. "Experts say that one should pay off their debts before saving for retirement or for emergencies like medical situations...or taxes due. Experts are also saying that we must get used to living with the the new interest rate environment of 3+%...

Interest rates can vary by region, however, so it's important to check with your bank for any rates that may be unique to your area. If you have a line of credit, it's wise to review your interest rate to make sure it's competitive with today's market.. Many credit card companies now offer low introductory rates of just 0%-2% for the first six to 12 months on a balance transfer. These offers can help in paying down your debt but be sure to read the fine print, because many of these offers have "balloon" payments at the end of the promotional period. If this surprises you, it can set you up for trouble when you have to pay off your balance in one lump sum..Why is it so important to pay down debt? Obviously, when you pay down your debt, you will free up your money every month to save or invest. With less debt, you'll be able to get lower interest rates and save more money in the long run.

So, how can you pay down your debt? First, try to eliminate any unnecessary expenses. If you're already on a tight budget, cutting costs might not be an option, but there are ways to cut back on expenses without reducing the quality of your lifestyle. For example, you might try carpooling to work or using public transportation instead. Next, review your budget to see where you can reduce your spending. For example, you might be able to eliminate one monthly bill by switching to a cheaper plan. Finally, look for ways to increase your income. This might include getting a second job or selling items you no longer need. If your current income isn't enough to make ends meet, you might want to consider applying for a loan or tapping into your retirement fund to help you out in the short term while you work on increasing your earnings over the long term. Once you've started paying down your debt, you should focus on maintaining your savings while continuing to pay down your debt. This can be a difficult balance to strike, but it's important to remember that you don't have to pay off all debt that you owe. At the end of the day the credit based economy is supposed to give you more leverage with your power of borrowing that you have worked hard to establish. Recommendation stretches too far if we expand on many possibilities that may arise in your real life situation. For instance in case of emergency the variation of this sound approach could be to restructure your debt partially by transferring balances and pay a one time fee to do that in lieu of having a relief in debt payments and use that saving approach to pay your healthcare bill. This way you are back on track to save up more and earn more by the time that credit payment relief period comes to an end.

Have opinions on how in Canada you'd approach this situation better? Leave comments here for us or share articles with readers of this post in the comments.

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Behrooz Talle

Star House Realtors is more about action than words and gimmicks! On here, realtor teams are trained to hustle vigorously. All deals made here are utterly win/win for parties. Your purchase or sale ma....

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