Pay Down Debt and Improve Cash Flow

How to Manage and Reduce Your Debt

Bill - Branch Manager
If you are in a situation where you have multiple debts - such as a mortgage, loan, credit line and credit cards it is important to understand what your debt is so you can manage it. Make a list of the debt you have, along with the interest rates you are paying on each. This will help identify which debts to pay off first. The key is to minimize interest costs, so paying off the debt with the highest interest rates is a good starting point. Lowering interest costs will help free up more money to pay off your other debts. Keep in mind though there are some debts that are realistic - for example, a mortgage. A Mortgage is a long term debt to help finance the purchase of your home, leaving you with a financial asset when it is paid off. Everywhere you turn it seems credit is being offered, credit card offers in the mail, at the supermarket and "Buy Now - Pay Later" incentives. Make sure you know what you're getting into. If you're choosing a credit card for a rewards program, for example to take that free flight, make sure the benefit is greater than the annual fee. If you know you're not going to pay off your credit card balance every month, take a look at a low interest credit card option to help keep interest costs down. Also be aware of the temptation of the "Buy Now Pay Later" offers - make sure the funds are available to pay that bill before it is due. The interest charged on these types of offers is usually quite high, and if you don't pay it off, in full, by the due date, you may owe the interest from the time of the initial purchase. All of a sudden that couch could almost be double the price! If you are feeling overwhelmed with debt, or just need a helping hand to learn how to manage debt we are here to help. Come in to any RBC branch and talk to us.