You’ve likely seen the stats that indicate that Canadians have incurred more debt per person as part of life during the pandemic. That spending has been part of the overall recovery of the country during some topsy-turvy times.
But, as with most countries who’ve faced similar situations, there are plans to keep that overall economic recovery going from a governmental standpoint. And, this historically means a raise in interest rates.
What it may mean for residents is hard to predict in some ways, but financial experts are hoping for the best. The best-case scenario is for the rise in rates to help slow down the recent rise in prices for consumers, while also making sure the overall economic recovery doesn’t slow down at the same time.
This also ties in greatly to the overall debt of the country. According to the Bank for International Settlements — which measures residents’ credit debt by country, Canada is one of the world’s most indebted economies, at 345% of its GDP. That’s not as much as Hong Kong or Japan, but it’s more than the US or China.
Canadian residents show their concern
As word goes out that interest rates may rise, it’s unsettling some Canadians. A poll earlier this year of residents showed that 35% of those who answered are concerned that a hike in rates may lead to their own bankruptcy.
The leader of Canada’s MNP accountancy firm believes that the proposed rise in rates will most affect those who have taken on more debt during the pandemic in order to make ends meet but haven’t yet paid it down sufficiently.
“The added debt servicing costs are coming at a time when many Canadians are already finding it less affordable to feed their families or pay for things like housing,” said Grant Bazian, president of MNP, who conducted the poll we wrote about above.
Another thing every business owner should consider when they take rate hikes into account: the poll showed that 81% of Canadians would be more careful now with how they spend their money. At the same time, only 25% said they had a clear understanding of interest rates affect their own finances.
“It’s promising to see some Canadians are taking note of the chatter surrounding impending interest rate increases, and are adjusting their mindset accordingly,” said Bazian. “But a lack of financial literacy impacts our findings as well because we know many Canadians don’t understand how interest rate increases will affect their personal financial situation.”
Collecting debt with the best customer service around
Having customers who may not have a clear handle on their own finances can make collecting on debt a difficult situation for any business. This is where MJR can help you.
Through our debt collection programs, we can act with empathy and understanding, offering your customers some workable options that cater to their financial situation. This all takes place while we still recover your debt and adapt to your needs as well.
Let us show you how we can help your business with debt recovery. To find out about everything we offer, visit us online: https://www.mjrcapital.com/
