Is Credit Card Debt Sabotaging Your Love Life?Apr 19, 2017
Can credit card debt help or hinder your chances of finding a partner? Canadians’ love affair with debt has become more intense in the last couple years as interest rates have continued to drop and house prices have hit record highs. Now, as the result of increased borrowing, many Canadians are feeling overwhelmed by their finances. And, although the effects of debt can be felt in everyday budgeting and money decisions, it may also be impeding potential romantic interests.
What your debt may be saying about you
Depending on the type of debt you carry, you may be unintentionally hampering your love life. A TD Bank survey found that 44 per cent of respondents might pass on a potential mate based on their credit card debt level. In contrast, only 26 per cent said they might be turned off by high student loan debt. Credit card debt, as opposed to school debt, could signal a potential spending problem, a lack of fiscal responsibility, or some may just be put off by the idea of paying down someone else’s debts. Student loans, on the other hand, are considered an investment in one’s future, with degree-holders having the potential to earn more over the course of a relationship.
Honesty is the best policy
Hiding your debt load or financial habits from a potential mate could cause major conflict down the road if you decide to commit and join finances. Being up front and honest about your spending habits and debt load is always best at the first signs of a serious relationship. And, it also gives you the opportunity to learn about your partner’s financial history and habits. Some financial experts suggest having a “financial date night” to lay out your financial history and money behaviours and learn how to find common ground. It can also help you form new habits together.
How to deal with credit card debt
The Financial Consumer Agency of Canada (FCAC) outlines some easily implemented ways to reduce debt and manage debts from month to month while growing savings and investing in the future. However, if you have significant credit card debts and are having trouble meeting your obligations, it may be time to get help. A debt help expert, such as a credit counsellor or Licensed Insolvency Trustee (LIT), can explain all your debt options in detail and help you find relief from debt. Some options may include:
- Debt consolidation – A consolidation loan will combine all your high-interest debts and can save you money each month by reducing interest payments. Your bank or credit union can help you apply for a debt consolidation loan.
- Credit counselling – You may benefit from one-on-one support and debt counselling or financial workshops. A credit counsellor can also speak to your creditors to negotiate a reduction in interest payments. To find a credit counsellor near you, refer to the FCAC.
- Consumer proposal – A consumer proposal is a formal negotiation between a Licensed Insolvency Trustee and your creditors, which can reduce the amount of debt you have to repay and extend the timeframe for repayment. A consumer proposal allows you to repay a portion of your debts in up to five years and can get you back on your feet sooner than bankruptcy.
An LIT can answer any questions you might have regarding debt relief, and explain the advantages and disadvantages of filing a consumer proposal. One disadvantage is that a consumer proposal will remain on your credit report for three years after you’ve made your last payment. But overall, a proposal can have less impact on your credit than filing for bankruptcy.
Are you having trouble dealing with credit card debt? Find help by visiting the FCAC and using the debt help tips and strategies or calculate your debt repayment options here. You can also join the conversation on Twitter by searching the hashtags #LetsTalkDebt #BDODebtRelief