How to Avoid 3 Debt Traps

While many experts are now calling for a soft landing in Canada instead of a recession, we aren’t out of the woods yet. The Consumer Price Index (CPI), which measures inflation and the change in prices for consumer goods, is rising. In fact, it increased 8.5% in July, following a 9.1% increase in June, according to Statistics Canada.

That means that without wages rising at the same rate (which they aren’t), it’s getting more costly for Canadians to afford everyday items, like groceries, clothing and gasoline. This could cause many people to use their credit cards, or take out a loan just to make ends meet.

Remember that debt isn’t bad. Using credit responsibly can actually help you increase your credit score. Read our blog on what to know about credit utilization to learn more.

But if you overextend yourself, it can cause you to miss payments or make it difficult for you to pay even the minimum payment because you simply don’t have the funds. And that hurts your credit score (more on that below). So watch to learn about three debt traps to avoid, as well as some tips so you don’t find yourself in a dire situation.

Original Blog Post https://www.cacheflo.co/posts/how-to-avoid-3-debt-traps

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