7 tools and tips to help you pay off your monthly credit card debt

1 in 4 Canadians have trouble paying off their monthly credit card debt.

Whether it’s from the basement renovation of your dreams, or booking that much-needed winter getaway, overspending (especially as we approach the holidays) happens all too easily.

Finding yourself suddenly unable to keep on top of credit card bills is an unsettling situation. But finding your way back to financial freedom doesn’t have to be scary when you take the right steps to get back on track.

Credit Education Week is happening across the country from November 12 – 15, with this year’s theme being My Money Vision. Capital One Canada and Credit Canada Debt Solutions bring this week to life to help draw attention to important issues in Canadians’ lives, like how to effectively navigate finances, make smart money choices, and build better credit.

Consider these tips below from Capital One and Credit Canada to help you take tangible steps towards a healthier financial future.

Set a goal

Having a vision for your money and setting financial goals is something the majority of Canadians can relate to. A recent survey from Capital One Canada and Credit Canada found that 56% of Canadians report having a money vision for this year. Establish a concrete goal for yourself, like paying off your monthly credit card bill on time, or saving a percentage of your income from each paycheque.

Be prepared

Unexpected events can often get in the way of our best efforts to manage a budget. Creating an emergency fund is a helpful way to be prepared for unforeseen circumstances. That fund should strictly be for money you don’t touch, but keep available for things like an urgent medical situation, car troubles, or losing your job. Although these situations aren’t something we like to think about, you’re definitely going to want to be prepared if they happen.

Use credit responsibly

Learning to use credit responsibly is integral to your financial well-being. A Capital One Guaranteed Mastercard can help you repair or rebuild your credit. When you use a credit card, your statements are reported to the credit bureaus, so demonstrating a track record of timely payments and spending within your credit limit can help you improve your credit score.

If managing credit is something you feel overwhelmed by, and you’re someone that benefits from one-on-one support (as many of us do), consider contacting a not-for-profit credit counselling agency that can help you create a plan to pay off your debt. An organization such as Credit Canada Debt Solutions is a great place to start.

Cut costs

Once you’ve got an emergency fund in place, you’ll want to consider how to build long-term healthy habits to start chipping away at your debt.

Tackling debt starts with having a very clear and honest view of your current financial situation. One way to do this is to go through all of your recent statements and list the total amount owed, the monthly payment and interest rate on each of your debts.  Credit Canada offers a free debt calculator tool that can be useful as you get started.

The “b” word

Once you’ve committed to cutting costs, make sure you’re doing it all within a framework that helps you track your progress. Yes, the dreaded budget.

It might seem intimidating, but making a budget for all areas of your finances is the best way to see what’s going on with your money, and hold yourself accountable to your goals. This will help you avoid wondering, “Where did my money go?” at the end of the month. Budgeting isn’t always straightforward, but Credit Canada offers a free monthly budget planner that’s worth looking at.

Improve your credit score

You’ve got your emergency funds in place, you’re cutting costs, and you’ve even mapped out a budget. By this point, you should give yourself a serious pat on the back.

Keep up this newfound financial headway by considering your credit score, and tracking your progress as you look to improve it. Capital One’s Credit Keeper allows you to access your credit score for free, regardless if you’re a customer or not.

Never stop learning

Get this: 58% of Canadians say they didn’t get the financial education they needed growing up. That’s nearly 6 in 1o Canadians.

November is Financial Literacy Month, and this serves as a good reminder that even just talking about your financial situation can help you feel supported. It’s important that we share and learn from each other’s wins and losses.

There are hundreds of events going on all over the country this month, so make sure you check out the Credit Education Week website. After all, learning about credit will empower you to use it wisely and responsibly.

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For more resources on how to get yourself out of debt for good and judgment-free advice from non-profit debt experts, visit Credit Canada.