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How to curb spending and tackle credit card debt

Credit card debt can be daunting, especially when it continues to pile up. With Equifax Canada revealing that credit card balances reached an all-time high of $107.4 -billion earlier this year, and that fewer of us are paying off our balance in full, now might be the time for an intervention.

Why is credit card debt so high?

The alarming stat that Canadians owe a collective $107.4 -billion in credit card debt is attention-grabbing, but may not signal a growing problem. Our population is growing rapidly – Statistics Canada says we welcomed a net 1,050,000 new Canadians in 2022 – and prices are always on the rise. 

It’s the news that more people are carrying a balance that’s cause for concern. Equifax says almost half a million more people have credit card debt than a year ago, and people with lower credit scores have been more likely to add credit card debt.

This is likely attributable to the rising cost of everything. Low-income earners have been hit hardest by inflation, and credit cards may be all that’s keeping some families afloat. Earlier this year, RBC estimated low-income Canadians would increase their debt service ratios at twice the rate of high-income households in 2023 as a larger portion of their earnings go to consumer spending.

Strategies for curbing spending and credit card debt

Reducing the amount of money you spend is not always a simple assignment. With bills to pay and mouths to feed, you may find you're already stretched about as thin as you can be. But if there is a chance to take some pressure off your wallet, it’s likely in one or more of these strategies. 

  1. Earn more to offset your spending. Sometimes the best defense is a good offense, so look for alternative ways to fund luxuries. There are plenty of “gig economy” apps that let you earn cash for doing odd jobs when you want to work. And many people make extra money by selling goods and services on the side (think baking and babysitting).
  2. Reduce, reuse and recycle. Look for ways to get more out of what you already have before you purchase something new. It’s almost always a better financial choice to keep your old car than buy a new one. Lego-obsessed children can stand to break and rebuild a set they already have from time to time. Keep only the streaming services you actually get use out of. And if you’re particularly courageous, this winter’s jeans can become next summer’s cut-off shorts (jorts).
  3. Create a realistic budget (and stick to it). Sometimes you don’t realize just how much you’re spending until you write it down. Craft a budget that reflects your income and essential expenses like your rent or mortgage, utility bills, groceries, transportation and insurance. Allocate the remainder to non-essentials, and hold yourself responsible for staying within your limits.
  4. Monitor your daily expenses. When you can pay for everything with a quick tap of your phone, it’s easy to lose track of how much you’re spending on a day-to-day basis. There are several apps that can help you track your spending, and some even connect with your bank and credit card accounts so you don’t have to enter things manually. Watch for trends and find ways to spend less on everyday purchases. 
  5. Set long and short-term saving goals. Saving money doesn’t have to be difficult or unpleasant, and it can help you stay disciplined and learn better financial habits. Set yourself two savings goals right now:
  • Pick a small amount of money between $25 and $100 to save over the course of the next four weeks, after which you can use it to treat yourself to the takeout meal of your choice. A jar for spare change works well for this one and can help you see your progress.
  • Pick an even smaller amount of money between $5 and $20 to save each week for the next year, after which you can use it for a small luxury like a new phone or a wardrobe update. Use a high interest savings account to eke out a few extra dollars from your investment.

The promise of a reward can help you stick to your savings plan, but you might find you’d rather not part ways with the money when the time comes. Whether you choose to cash out or not, you’ll have something to show for your frugality.

What to do if you carry a balance month to month 

Carrying a balance on your credit card can be a big source of stress. It reduces the amount you can spend using your card and costs a lot of money in interest. It can also make it harder to access other forms of credit, like a mortgage, when you need it.

If you’re among the growing crowd of Canadians with credit card debt, the only real solution is to make a plan to reduce your spending and pay off your balance. But there are also things you can do to temporarily take some of the pressure off.

  • Freeze your credit card. Your credit card balance can’t grow if you can’t use your card, so consider taking it away from yourself. Use your mobile banking app or call your credit card issuer and ask them to lock your card so it can’t be used. For a more visceral experience, physically freeze your card in a block of ice to make it harder to use. Don’t forget to keep making payments while your card is frozen.
  • Transfer your balance to a new card. Many credit cards offer a promotional interest rate on balance transfers when you first get the card. For a small fee, you can use such an offer to avoid paying interest for several months while you work on paying down your balance. One of the best balance transfer credit cards in Canada is the MBNA True Line Mastercard credit card. For a 3% transfer fee, you can transfer your balance from another card and get 0% interest for the first 12 months. This card also has a low everyday interest rate of 12.99% on purchases and cash advances, making it a good choice for carrying a balance.

4.5 Ratehub rated
Balance transfer offer

for the first 12 months. 12.99% after promo.

Pay $325.00/mo

during the promo to pay off $3,900 transferred balance

3% Balance transfer fee

A fee of $117 will be added to your balance

Annual fee


  • Choose a low interest credit card. Credit cards are one of the most expensive forms of credit out there, charging interest rates as high as 24.99%. If you carry a balance, consider getting a  low interest credit card that can cut your interest rate by half or more. For low interest credit cards, a great choice again is the MBNA True Line Mastercard credit card.

The bottom line

It takes discipline and hard work to curb spending and tackle credit card debt, but fortunately there are tools you can use to make it easier. With a plan to cut your spending, and an alternative credit card to help you save money on interest charges, you can get back in control of your finances.

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