Get Out Of Debt

It’s easy to get the terms credit & debt confused. They seem to be interchangeable, however they are two different words with two different meanings.

Definition of Credit

Credit is a financial tool that people seek to acquire from financial institutions. Canadian Banks, credit unions, credit card companies all offer credit to their customers in Canada.

I call credit the “before” part of the equation. You have to have credit before you have debt.

Credit offers come in many different forms.
Mortgages and 2nd mortgages Car loans Payday loans Credit cards Lines of credit There a many other types of credit which I won’t list here

Here’s where people get confused about Credit / Debt.

There are two types of credit available.

Fixed loans Revolving credit

Mortgages and car loans are fix payment loans Lines of credit and credit cards are revolving credit.

Canadian Mortgages and car loans are only credit that are available to you. That means that once you acquire a mortgage or car loan it becomes a debt to you. A mortgage or car loan is never credit to you.

HERE’S WHY:

Where you ‘re shopping for a $250,000 mortgage, you’re looking for credit to buy your new house. You’re shopping for credit at this point.

When you visit your local banker or mortgage broker in Canada you’re doing the following:

Asking the creditors to give you some credit. You’re applying for credit You need to be a approved for credit. Creditors check out your credit worthiness, credit score, credit reports etc.

These are all the activities you do BEFORE you get the credit that you’re requesting.
Credit cards and lines of credit on the other hand can be BOTH credit and debt.

HERE’S WHY

Let’s say you have a credit card with a $5000 limit. At the beginning you have $5000 worth of credit available to you. After a while of using your credit card, you use up $1,000 worth of credit available. That $1,000 of used credit now becomes debt.

BEFORE: $5,000 credit available

AFTER: $4,000 credit still available $1,000 debt owing

This is probably why people in Canada get the terms credit & debt confused. People don’t usually need credit counselling, they need debt counselling. They counselling after they’ve acquired too much debt. ( I guess people could use credit counselling which would help them learn about how they can wisely use their credit that is still available. )

YOU NEVER HAVE TO MAKE PAYMENTS ON CREDIT!!

As I always like to say, “you NEVER have to make payments on your credit available. Credit available DOESN’T ruin marriages. The creditors DON’T make any money on credit available.

You do have to make payments on outstanding debts, or debt that you’ve incurred. Too much debt does ruin marriages, and Canadian creditors love it when you’re indebted to them. That is how they make their money.

Credit / Debt? Debt / Credit?

There is alot of credit available to consumers in Canada. It’s big business. The problem is when Canadians take on too much of that credit which becomes their debt burden.

I hope that this post helps you better understand the difference between credit & debt and how these terms affect your personal finances.

Is Your Credit Card A Great Financial Tool Or A Weapon Of Mass Financial Destruction?

A credit card is a great financial tool but sadly its one of those “tools” that can cause a lot of damage too if not used with the utmost care. You might be up to your eyeballs in debt at the moment and wondering how, if ever, you’re going to be able to become debt free. Well this article is going to show you some simple credit card debt consolidation techniques that work.

Jake, a friend of mine described the best thing about having a credit card as it being


“a great way to carry a large amount of money around in a convenient manner.”



…true in some respects and like any other convenience there’s a price to pay.

Credit cards offer ease for you to spend money whenever you want to and like in my friend’s case you usually end up spending too much. Sound familiar? The problem is you’re spending money you don’t have. Because you have an enticing option to payback only the minimum amount each month it’s an option a lot of people are then forced to take because they cannot pay anything more.

The Dark Side Of Credit Cards

You know what the worst part about credit cards is? It’s this. For each balance that still is unpaid at the end of each month you’re adding to your interest and as a direct result, in just a few short months you’ll find yourself overloaded with credit card debts. Jake bought some furniture for around $5,000 and was only making the minimum monthly payment of $50! – This left him with $4,950 that he still owed and while it appeared convenient at the time he was being smacked with interest on the balance…ouch!

There are ways to avoid this problem and the best piece of advice is this … find the best debt or credit card debt consolidation guide you can find and follow the steps as you read them. When you do this you are guaranteed to become debt free in a few months or years.

Stop Paying The Minimum Amount Each Month

Simply paying a minimum amount on your credit card is NOT an option for you. That is the core message of this article and the one thing you should take away from it. We’re just warming up, so be sure to look out for part II of this series titled “Credit Card Debt Consolidation Guide To Help You Legally Get Out Of Debt Fast”

In the last few years, the debt consolidation loan has emerged as a great solution for those who have got trapped in different kinds of debts. In most cases, it has been found that people misused the various financial tools and ended up being drowned in huge piles of debts. Earlier, it was credit cards, and now a new kind of debt is killing the financial life of people.

The Misuse Of Cash Advance Loans

The payday loan is a great financial tool that can help you in times of emergency when you need instant cash and are not in a position to wait for the payday. There might be some small short-term emergencies that need urgent attention. This is where, such short term loans come to your rescue. The greatest thing about these loans is that they can be applied for and be approved for very quickly.

All it takes is just a few hours and the money will be directly credited into your checking account. However, people sometimes do not use a very prudent approach towards these short term loans and this eventually leads them to a deep payday loan debt problem. This is where they have to take the services of debt consolidation loan in order to get debt relief.

Debt Consolidation Or Bankruptcy?

The people who have payday loan debt basically belong to lower or middle class families. They get hand to mouth salary and any amount of debt may sound very huge for them. In particular, if it is a short term cash advance, the debt may rise very fast because of the high interest rate. The debtors sometimes are so frustrated that they even get ready to try bankruptcy as a solution for their debts. However, the matter of fact is that no matter how intense the debt problem is; there is still a solution for it with debt consolidation loan.

Therefore, debtors are highly recommended to try out consolidation also, before they try any suicidal step. The various payday loan debt consolidation services will not only save your financial life but will also make your life debt free in a very short time. The debts associated with short term cash advances are never too much that you cannot repay the same. All you need is the right strategy and a prudent approach. This is where you will find the debt consolidation loan a great help.