“What I’d also like people to take into consideration is the opportunity cost of letting a debt sit for any period of time,” notes Arbour. “What are you giving up on by not repaying that debt as quickly as possible, or even letting it get larger? What dream or goal do you have for your future self or loved ones that you could be saving for now, rather than using your hard-earned dollars to repay that debt for months or years to come?”
There’s evidence that carrying debt can weigh on our emotional well-being, too. According to the latest Consumer Debt Report from the Consumer Credit Counselling Societythe majority of Canadians feel concerned or worried (84%) about their debt—that number was 54% in last year’s survey.
Debt, particularly when held for a prolonged amount of time, can cause enormous amounts of stress. Arbour points to sleep problems and health complications as the physical effects. These can lead to lower productivity and higher absenteeism, negatively impacting your professional life. Emotionally speaking, debt can affect your moods and your relationships with others.
Get free MoneySense financial tips, news & advice in your inbox.
Proven strategies to bring down credit card debt
Once you’ve decided to tackle your debt, you’ll want to build a strategy. “The best, first step is to take a deep breath and to face the issue,” Arbour advises. “Debt can feel very isolating, but you are not alone and there is help available.”
1. Make a budget
You simply can’t plan to pay back debt effectively unless you understand what you’re working with. “Knowing your numbers—how much you owe today, at what interest rate and to whom—is a great place to start, as well as knowing your resources—how much money you have to direct to the debt each week or month,” says Arbour. She also recommends reaching out to a neutral, confidential, professional source, like her organization, which provides accredited counsellors to assist.
Be wary, however, of advice or schemes that sound too good to be true. “It took some time to get into debt, so it could take some time to get out of it,” Arbour warns. Be skeptical of companies promising quick fixes.
2. Negotiate interest rates or the terms of your debt
One lesser-known strategy is to approach your creditors and ask to renegotiate rates or terms. This could involve asking for a lower interest rate—or even asking for the ability to pay on an accelerated schedule, should that be within your means.
“It’s important to know the terms and conditions of your particular debts,” says Arbour. “Ideally, you don’t want to incur any penalties or charges that would negate any benefits you’d get by paying things off early.”
GIPHY App Key not set. Please check settings