Times are tough and more and more Canadians are relying on credit cards to buy necessities and pay bills. Household debt in Canada is at record highs and with probable increases in interest rates in the future, many of us will be in even more dire straits if rates rise significantly. While your credit card issuers cannot force you to accept higher rates, they can close your accounts if you do not agree to them. Can you live without those credit cards? The sad fact is most Canadians cannot and some do not even know how deeply there are in debt. Debt calculators are tools you can use to find out how much you really owe.
Before you can use debt calculators to see where you are in terms of your debt, you will have to do some homework. You will need to sort through your financial records and get the total balances due and the interest rates on all your current accounts. To get the most accurate picture you should include not only your unsecured credit accounts, but your secured loans like mortgages and auto loans as well.
The Internet is loaded with debt calculators in a wide variety of flavors. To start off, stick with basic ones you find easy to use. You may notice some sites ask you to sign up or register before using the calculator. Typically, these are from companies that offer debt solutions. It is best to stick with debt calculators from websites with no strings attached. Both MSN Money and CNN Money have reliable debt calculators you can use.
For many Canadians this process can be a real “eye-opener.” Some of us react to financial troubles by burying our heads in the sand with the hope things will get better. Seeing some cold, hard numbers of just how much we owe can be a sobering experience.
You can also use debt calculators to see how long it would take you to pay down your debt. Keep in mind these debt pay off calculators assume you will not keep adding to your credit balances. For some people who are just getting by, this is not possible. Credit availability has actually become a source of “income” needed to purchase the necessities of life and pay the bills.
Although coming face-to-face with our total debt as well as how long it will take to get out from under it can be painful, if that realization spurs us into action, the debt calculators have done their job.
You can’t get to where you want to be if you don’t know where you are. Debt calculators can tell you where you are. What’s more, they can tell you if there is any possibility at all of your climbing out from under your debt on your own. The calculators will show you how you can reduce debt by making additional monthly payments, but if you cannot come up with the money, what is the point?
The point the debt calculators are showing you is you need other debt solution options. To learn what they are, schedule a free initial consultation with an accredited credit counselor or licensed bankruptcy trustee in your Province. If you’re concerned about bankruptcy, you should know these professionals may be able to help you get out of debt without declaring personal bankruptcy.