Don’t Get ‘Tricked’ By Debt

In honour of Halloween this week, MNP Ltd. presents the following somewhat scary facts about Canadian debt.

1) Have a mortgage? If mortgage interest rates go up (and they almost surely will), just a 1% increase in interest rates can equal a 20-30% increase in your monthly mortgage payment.

2) Even if you have no debt, you do. The average federal government debt in Canada is approximately $7,500 per person.

3) Not all provinces are created equal when it comes to debt. In provinces like Alberta, the average debt rate per person is around $3,000, while in Quebec, it’s a whopping $22,000.

4) Here’s a spine-tingling fact. Given less than half of Canadians are actually taxpayers, the amount of federal and provincial debt above can be doubled to reflect the amount of debt per taxpayer.

5) If you feel shackled to your debt, consider that the average household in Canada owes 163% of its annual income in debt (including mortgages, credit cards, car loans, etc.)

6) Don’t be haunted by the ghosts of spending past. If you look on your credit card statement, it will tell you how long it will take to pay off your credit card if you only make the minimum payment. Typically this will be 15 years or longer. I’ve even seen one statement that said it would take 114 years to pay off, if you were only to pay the minimum payment.

7) The interest rate charged on loans from payday advance lenders is often several hundred percent a year. Even on the smallest loan, that rate is enough to give anyone goosebumps.

Debt can be scary – but it can also be tamed. If you’re anxious when opening your mail or answering the phone for fear of someone coming to ‘reap’ what’s owed to them, it’s time to take a serious look at your debt relief options.