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Credit is the ability of a customer (you) to obtain goods or services before payment, based on the trust that payment will be made in the future and Debt is something, typically money, that is owed or due.

Credit Cards

Credit cards offer a convenient way to pay for goods and services and are usually a person’s first access to credit. If you carry a balance on your credit card (meaning that you don't pay it all off each month), your interest charges will increase the cost of everything you buy. On the other hand, if you pay off your balance in full each month and don’t use the card for cash advances or cash-like transactions, you won’t pay any interest. There is so much more to know, make sure to do your homework when you get a credit card and read up on the Financial Consumer Agency of Canada (FCAC) website for great tips!

Want a credit card? Try the Credit Card Selector Tool today! 

Debt

Nearly all adults will incur some form of debt at different stages of life (e.g. paying for school, buying a car or house) and if you have a money plan, can make your payments in full and on time, it can help you to build a credit rating which will allow you to borrow, usually, with reduced interest rates. Debt doesn't have to be scary if you know what you're doing but consumers who spend beyond their means can end up with an unmanageable debt load so it's important to learn how to manage your debt well.

Tips for debt management

  • Review your budget carefully to see where you can cut expenses.
  • Try to pay off your debts with the highest interest rates first, such as credit card debt.
  • Use a Credit card payment calculator tool to see how to pay off your credit card debt faster.
  • Aim to pay your credit card balance in full every month. If you can’t, always make at least the minimum payment on time to avoid additional fees or rate increases and to make sure your credit rating is not affected.
  • If you have high-interest loans, consider consolidating them into a low rate option, such as a line of credit.
  • If you are having trouble managing your debt, stop using your credit cards and other credit products until you have reached your debt repayment goal.
  • If you are carrying a balance, make your debt payments as early as possible to reduce interest charges. Check your contract to confirm there are no early payment penalties.

Getting Help

If you have unmanageable debt and/or have stopped making payments on what you owe, don't let it get worse, reach out for help - immediately! There are accredited (safe) places to talk about what is going on so don't freeze in fear, reach out and see what can be done. A local resource is the Credit Counselling Services of Atlantic Canada so please contact them if you don't know what to do.