Canadians carry approximately $80,000,000,000 of credit card debt in total. Canadians make about 3 billion transactions per year on their credit cards, about 5,700 transactions per minute. (Reference: https://www.greedyrates.ca/blog/10-canadian-credit-card-facts). The debt hole becomes deep and there are companies that cater to this here in Toronto, Ontario Canada. There are roughly 200 Money Marts and cash loan businesses when in fact, 30 years ago there was barely a handful of them. There are also many pawn shops where people that are maxed out bring in their gold and valuables under duress to try and get money to pay off their debts. They get taken advantage of because they are emotional about their poor financial situations and the pawn shop owner takes full advantage of these situations. Some of these money and pawn shops have bullet proof glass because their clients are more erratic than basic bank branches because their clients are more emotional and desperate. High debts have a spillover effect and results in drug use, alcoholism, depression and misery. In extreme cases, the person is in such distress that they might commit suicide.
Debt is money you owe others, which could be individuals, credit card firms and or a bank or insurance company. We borrow money to also buy large ticket items such as a house or car and or student loan debts to pay for a higher education. Canadians use their credit cards to purchase goods from stores or online and then they have a 30 day grace period in which to pay it back. If they fail to do so after the 30 days graced period…they are charged interest of up to 19% on the balance. If you don’t pay for 5 months…your $100 of debt could be $200 of debt and the 19% interest is now calculated and compounded on this new balance of $200.00…which equates to roughly $38.00 of interest on $200.00 owed. It’s a fairly crappy deal but for the big Canadian banks, it’s a great return on investment. The credit network is already set up and since around 47% of all credit card holders don’t end up paying their bills at the end of the month, that’s a great return on investment. You know you’re in debt because you can feel the negative effects of it. You feel anxiety and a heightened sense of pressure.