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Pandemic causing financial worries for Canadians

The CEO of Credit Canada, Keith Emery, has some tips for people who may be worried about their finances during the pandemic
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The pandemic is stressing Canadians out -- many are starting to feel more and more worried about their finances.

Keith Emery is the CEO of Credit Canada.

He tells the Mike Farwell Show on 570 NEWS, debt can be a useful tool for consumers, but it can also be a source of serious financial stress.

"People who have tight budgets, cash flow issues, there is a risk that they will get themselves into a high-interest debt. That's either credit cards, or potentially worse -- payday loans, high-interest loans. Once they get into that kind of a debt situation, it gets very difficult to dig themselves out because they weren't necessarily going to have a surplus of income and they're going to have high-interest charges that are going to eat into their monthly budget."

Emery says people may be stressed about their financial situation because of some of the government supports available to them right now.

"When the pandemic first hit, we assumed that our existing clients were going to be hit quite heavily due to job loss and the economic shock and we thought we're going to see a surge in demand for credit counselling. But it actually had a bit of an opposite effect. What we discovered was with some of the payment deferrals and the economic support, the clients were actually in the short term, financially in the same shape or in even better shape."

He adds that a lot of the stress may actually be coming from uncertainity of what will happen when the government supports come to an end.

So Emery says you should remember that if you're using a credit card to fill in gaps, you'll still have to eventually pay it all back.

"You know, it works for a while and then eventually you hit the limits on all your credit and you have to start reversing it and you don't have the money to do that. You just accumulate credit card debt over time. The second issue that we find is a financial shock and this is probably one of the greatest financial shocks that we've experienced. And you may not have emergency savings."


Aastha Shetty

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