Canadian Debt Out of Control?

Bank of Canada Warns 

of Consumer Debt Issues

For the first time in 12 years Canadian household debt has exceeded the U.S. when our debt - to - income ratio hit a record 148.1%! This ratio is up 5% from the second quarter of this year when the ratio was 143.4%!

At a speech yesterday Bank of Canada head, Mark Carney said he was worried about Canadian debt levels and warned that both Canadians and Canadian businesses need to curb their need for cheap money, as the economic crisis is far from over.

He noted that since the bottom of the current recession, Canadian debt has actually increased by seven percent while US consumers have seen their debt decrease by 3 percent.

The Prime Minister echoed Carney's concerns with the level of debt the average Canadian is now carrying.

Dangerous Debt Signs

Follows are some warning signs that your debt may be getting the best of you and that you do in fact already have a debt problem:

• You borrow money to pay your monthly bills
• You do not pay the total credit card bill and can only pay the interest
• You need to use credit cards, they are not just a convenient way to pay
• You are being called by your creditors because of delinquent debt payments
• Hydro, telephone, cable etc. are not being paid on time

This is the time of year when many of us, wanting to give lavish gifts haul out the plastic and worry about paying for it later. If that is you, this year, you might want to reconsider and only give something you can afford to pay cash for. Come January when the bills come rolling in, you will be glad you took this advice.