Canadians Should Take More "Interest" When Using Credit Cards For Holiday Spending
Holiday Incidentals like Food and Travel Can Add Years to Debt Repayment
November 15, 2012 -- !-- AddToAny BEGIN -->
TORONTO, ONTARIO -- (Marketwire) -- 11/15/12 -- Post-holiday credit card debt is as much a given these days as too much eggnog on Christmas Eve. That bottle of wine for your host, the new ornaments for your tree, the gas in your car to drive to your relatives' an hour away - these are all incidental expenses that most Canadians don't factor into their holiday budgets, but can have an enormous impact on the amount of time it will take them to pay off.
According to a recent RateSupermarket.ca poll, nearly one fifth of respondents anticipate spending over $1,000 above and beyond the costs of gifts; 26% expect to spend anywhere from $500 to $1000 on incidentals this season. In a separate study conducted by TD Canada Trust on holiday spending, it was found that the average Canadian spends $1,100(i) on their total holiday expenses.
"Incidentals can really add up, and that's where trouble can begin if you are using credit to fund the holidays," said Kelvin Mangaroo, President of RateSupermarket.ca. "With compound interest on credit cards, Canadians could be paying off holiday debt for years if they're not careful. They might want to compare the market and consider switching to a low interest credit card, or a low balance transfer option if they are not anticipating paying off their holiday spending in full."
Assuming an average total holiday spend of $1,100, that balance on a typical credit card could take as long as 11 years to pay off(ii), if making only the minimum payments each month. While this is an unlikely scenario for most, those high compound interest rates could mean you won't have paid off this year's holidays by next year's.
RateSupermarket.ca is helping to ease some of this potential debt: From now through December 15, 2012, successful applicants of select credit cards will receive a free $100 gift card.
They will also be entered to win a $1,100 cash grand prize to help fund the holiday season. For more giveaway information, visit http://www.ratesupermarket.ca/deals/holiday-promo/.
(i)Numbers from TD Canada Trust Holiday Poll, 2011
(ii)Based on a 19.99% interest rate, with 2% required minimum monthly payment
About RateSupermarket.ca (www.ratesupermarket.ca)
Over 2.5 Million Canadians have found their best rate for personal finance products on RateSupermarket.ca. Launched in 2008, RateSupermarket.ca is Canada's largest and most comprehensive rate comparison site, offering visitors transparent access to the best mortgage rates as well as credit cards, bank accounts, insurance quotes and GIC rates.
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