Reduce Your Debt In Three Months

When you consider your life, is your cup half empty or half full?

Do you recognize potential opportunities or more of what is not working?

By now, COVID-19 is part of our everyday life and it is evident that the end is not yet in sight. 
 
So now what?
 
Canadian financial institutions are cognizant of these inherent hard times and are offering debt deferral programs for credit cards to help customers. Whilst each institution has its own unique offering, an option for a three-month payment deferral with a lower interest rate of 10.99% is a common theme. This alone could result in 9% savings if your credit card interest rate is at the typical 19.99%.
 
If you accept the deferral you don't have to pay your credit card for 3 months and during those months interest will accumulate at the lower interest rate.
 
Sounds like a great deal, right?

Sure. But what if you could use this opportunity to your advantage to get out of debt faster?
 
Now that sounds like a better deal.
 
You are not required to make payments during the deferral period, but if you’re money smart (which I know you are) you still want to make payments. Making payments while having a lower interest rate allows you to pay down some of your principal and get out of debt faster over the long term.
 
Here’s an example:
If you had a credit card balance of $10,000 your monthly interest cost would approximately be:
At original interest rate of 19.99% - $167
At 3-month deferral interest rate of 10.99% - $92

If over the next 3 months you still committed to paying your original minimum payment of say $167, you would be paying down your principal by $75 each month. Which equates to $225 of principal paid over 3 months.
 
Now imagine if you paid even more?
 
You could reduce your debt significantly over the next 3 months.
 
But how do you pay more?
 
This is where having a budget & Money Master Plan is extremely important during these times so that you are clear on where your money is going and where you can save.
 
Your expenses have certainly been reduced and you are no longer paying for that gym membership so take your reduced expenses and pay these amounts to your credit card for the next 3 months.
 
Money and abundance are still all around you. If you look for them.