TORONTO, Dec 10/10: The Bank of Canada said Thursday in its December issue of the Financial System Review that “Developments since (June) suggest that the vulnerability of the Canadian household sector has increased.” The report discusses the rise in household debt because of the low interest rates as Canadians have purchased homes and shopped for their consumables using credit. The difficulty for Canadians will occur if interest rates and/or unemployment increase.
“Canadians have received yet another warning if the labour market changes, their ability to make debt payments will be reduced,” says Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada. “Unlike several months ago, when the Canadian economy looked more stable, this appears to have changed based on this report,” continues Schwartz. The central bank’s review suggests “the probability of an adverse labour market shock materializing is judged to have edged higher in recent months, owing to the downward revision … to the outlook for the global and Canadian economies.”
This is a different forecast, and Consolidated Credit has taken these warning very seriously advising their clients to put their financial houses in order so they can be better prepared if and when the Canadian economy takes another downturn. “We have witnessed firsthand the effects of increased debt on families across the country,” adds Schwartz. “Our phones ring continually with callers asking how they can better manage their financial situation and reduce the debt they have accumulated.” For some it’s learning budgeting techniques and re-evaluating how they spend their money; however, for those who are unable to manage their payments because they are stretched to their limits, we have offered more drastic debt solutions.”
With the holiday season upon us it is imperative Canadians make wise decisions on how they choose to pay for their purchases either with cash/debit or credit card. Kim Thornton, a recent Alumnus of Consolidated Credit Counseling Services of Canada’s program, shares her holiday spending strategy. “I budget an amount per person and then stick to it. I love that I can do it all with out a credit card!” says Kim. Thornton wants to inspire others not to bury themselves with debt this holiday season.