If you’re young and you’re Canadian, chances are you’re in debt. Even worse, my generation, Generation Y, has a bad habit of not making monthly payments on time. This needs to stop.
Even though you take note of interest charges when your monthly bills are mailed or emailed, you might not be aware of the other problems associated with not paying your bills on time. Pay the minimum fee at the very least. Your phone company, your electricity provider – or whoever – will put your account into delinquency in as little as 15 days. It’s true, and that will kill your credit score automatically. At a meeting with my bank, I discovered that even one account in delinquency (I’m fine – don’t worry) would drop me four credit brackets and make me ineligible for a line of credit. With a bad credit score, you’ll be unable to borrow more money, get a good rate on a mortgage for your condo or a reasonable car payments scheme.
Look south, our neighbours in the United States are learning about bad debt the hard way. Loaded with debt and unable to pay their bills, experts are predicting a lost decade - or worse - for America. The Business Insider released 21 reasons explaining why the economic recovery is a joke for most Americans. Pay special attention to reasons two, 12 and 18. The upper and middle class has shrunk and is shrinking; a record high 40 million Americans are on food stamps; and, get this, the U.S. Treasury is asking for donations. By the way, Gen Y’s bad habit of not paying their bills is number 21.
The Certified General Accountants of Canada have released a report that gets into Canadian debt in detail. Paying your bills on time is the best way to avoid paying bigger interest rates next time you need cash. Take control of your money. Cheers to Pat, who suggested a link on another blog post that lets us compare interest rates on Canadian credit cards. Every little bit helps.
