Debt crusader calls for credit-card-free day

The Canadian Federation of Independent Business (CFIB) and debt crusader Gail Vaz-Oxlade are encouraging Canadians to give their credit cards a break for one day a week.

Credit Free Friday calls on Canadian consumers to help small businesses, and themselves, by paying with debit or cash when they shop on Fridays.

Read: Get out of debt without going broke

“Small businesses are finding it increasingly challenging to absorb the high fees they are charged by the credit card companies and banks,” said CFIB president Dan Kelly.

“Very few consumers know that $5 billion to $7 billion each year in credit card processing fees is embedded in the cost of everything they buy, and with ever-higher tiers of premium cards hitting the market, that cost is only going up,” he says. That the merchant often loses between 2% to 3.5% of a credit card sale, he adds.

Credit cards are also enabling record-high levels of consumer debt. The average Canadian now has approximately $27,000 in consumer debt, not including mortgages, says Statistics Canada.

Read: Canadians blame money problems on sneaky spouses, friends

Credit card debt specifically totalled close to $74 billion Canada-wide in November 2012 – over $2,000 per capita. The proliferation of credit card reward programs encourages consumers to use their cards more often, without always thinking of the consequences, says the campaign.

“If you can’t go one day a week without using your credit cards, you have to wonder how the credit card companies trained you so well,” says Vaz-Oxlade.

Federal NDP consumer critic Glenn Thibeault also supports the campaign, and encourages Canadians to participate.

More details are available here.

Also read: 3 tips to reduce debt

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.