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Credit cards are among the most widely-used of any financial instrument. And there’s good reason for that. Credit cards are an easy way to pay for things, can help track spending, and many even provide rewards for doing nothing more than making your everyday purchases.
Credit cards can also be a helpful tool for avoiding high-cost debt or getting out of debt. Offers like 0% interest on purchases and 0% balance transfers can provide some breathing room for paying down debt, while not racking up additional interest.
But credit cards aren’t all fun and games. Interest rates are typically extremely high. And cash advances often carry even higher rates. Though it’s nice that credit cards make it easier to make purchases, it’s sometimes a little too easy to spend on a credit card. And since the nature of a credit card is to provide credit (that is: a loan), you don’t get cut off when you run out of money, the way you do when you stick to spending just the cash you have available.
Which all makes it no wonder that on average each Canadian household has more than $7,000 in credit card debt.
This makes it well worth while to spend some time choosing the right credit card for you and understanding how to use a credit card, so you get the benefits without running the risks.
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