BONOKOSKI: The long and sad journey with that first credit card

More than half of Canadians say they are only $ 200 a month from insolvency

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Put on the hurtful music. Take out a few fancy glasses and open the right bottle of single malt scotch.

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Do not be shy. It’s my dream, not yours.

“So what’s bothering you?” Didn’t I hear you say.

“Hur-rump,” I finally answered.

“My left leg appears to weigh around 200 pounds. And I have to drag it.

“I walk over to that old chair in the corner to relax. Looks like the Springer and Romano duo have that game up their sleeve,

“Wake me up when this is over.”

“Who?” Someone asked me. “The ball game or the election? “

“The game, of course.

The Blue Jays have been on a roll lately, beating the hapless Orioles 6-3 with Bo Bichette scoring 5 RBIs and making him eligible for this year’s Roberto Clemente award.

They are my refuge.

Countless Canadian households were able to weather the economic blow of the pandemic last year thanks to unprecedented government financial assistance and loan deferral programs.

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But the imminent end of such support threatens to trigger a sharp turnaround for borrowers and consumers.

We know how it works,

In the latest Consumer Debt Index poll from MNP LTD, Canada’s largest insolvency firm, just over 53% of Canadians polled said they were at most $ 200 a month from being unable to pay all their monthly bills and debts. This represents a jump of 10 percentage points from December, as well as a five-year high.

“We have seen that financial aid measures related to the pandemic have provided some leeway over the past year, but we are now seeing a reversal,” said Grant Bazian, president of MNP LTD. “The anxiety Canadians feel about making ends meet – or being unable to do so already – tells us that we could eventually see an avalanche of households falling behind on their payments or defaulting on their payments. loans, mortgages, car payments or credit cards. “

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According to the quarterly survey conducted by Ipsos, 30% of Canadians say they are already insolvent, with no money left at the end of the month to cover their payments.

On average, respondents said they only had $ 625 left after making their payments, down $ 108 or 15% from December.

A quarter of Canadians surveyed say the pandemic has pushed them into more debt. This includes 20% who said they used savings to pay bills, 14% who took credit cards, 7% who used a line of credit, 3% who took out a bank loan, and 3% who took out a bank loan. have put off mortgage payments.

“Those who take on more debt are increasingly vulnerable to interest rate hikes in the future,” Bazian said.

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“They might find that their debt becomes unaffordable when this happens.”

Given the low interest rate environment, six in ten Canadians said now is the time to buy things they might not otherwise be able to afford. Almost half said they feel more comfortable taking on debt than usual.

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Yet 51% of Canadians said they were worried about their ability to pay off debts if interest rates rose, and just over 33% said they feared rising interest rates could pushes them into bankruptcy.

“Unfortunately, using credit is a knee-jerk reaction among many Canadians,” Bazian said.

“For those affected, this is probably a good time to stop thinking about debt as a solution when it can actually become a trap.”

For me, it started during the cool week at Ryerson over 45 years ago when a pretty blonde employee installed an RBC VISA card for me.

She was too young to shoot by then and has probably piloted the coop ever since.

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About Joan Ferguson

Joan Ferguson

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