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September 05, 2017 | By: Paulette Thompson

4 Things Anyone With a Credit Card Should Know

Credit Cards

Many people find themselves in trouble with credit card debt, so if you’re in a situation where you feel overwhelmed and you’re unable to pay your credit card bills, you're not alone. In fact, for many people, the loss of a job, a personal or family illness, or a pressing financial need can lead them to depend on their credit cards to survive. This sets off a whirlwind of bad activity, and before you know it, you’re in an insurmountable debt hole.

According to an article in the Financial Post, almost 50% of Canadians are living paycheck-to-paycheck, while 30% agree they feel overwhelmed by credit card debt. That means it would only take a single unexpected event, such as a job loss, reduced hours or a medical emergency, to set off a chain of credit-ruining circumstances.

So, if you’re like the millions of others who have landed in this boat, here are a few important things to know:

1. Credit Card Repayment Limitations

Canadian law dictates that creditors have a set period of time to attempt to collect a debt. This collection period is often referred to as a statute of limitations, and once it expires a creditor can no longer attempt to collect the debt. That’s why many creditors will try to sell outstanding debts that are about to expire to collection agencies.

By selling your debt, usually at a lower price than is owed, the creditor can at least recoup some of their money. That’s when the debt collection agency begins aggressive tactics to get the consumer (you) to pay back the debt. Many debt collection agencies might claim that once a debt is sold the “clock” or collection period is reset, but that isn’t entirely accurate. That only happens if collectors intimidate you into acknowledging the debt in writing. Never do this until you’ve spoken to a certified credit counsellor or another advisor first.

In some cases, unsecured debt is voided after the statute of limitations occurs (that is, as long as you didn’t make a payment, address or take ownership of the debt in writing).

But you’re not off the hook. Even if the collection period expires, delinquent debt can still remain on your credit rating and reports for years to come, which makes borrowing or building credit very difficult in the future.

2. How Long is the Statute of Limitations?

The statute of limitations or collection period on credit card debt depends on the province you live in, and each province sets its own rules regarding credit and debt collection. For instance, Alberta, British Columbia, Ontario, Nova Scotia, Saskatchewan and New Brunswick all allow creditors up to two years to collect unpaid debts while Quebec currently allows creditors up to three years to collect debts. The Northwest Territories, Yukon, Manitoba and PEI all allow creditors up to six years to collect debts.

3. How Often Can Collection Agencies Call Me?

According to Ontario, Alberta and Nova Scotia rules, debt collectors cannot call you more than three times a week. This varies by province, but as a general guideline, credit agencies and debt collectors are usually prohibited to call you in the early morning (before 8am), on holidays, and on Sundays too. If they do break the rules and you feel harassed or threatened, you can file a complaint to the agency with evidence regarding the issue. If the problem persists after you’ve submitted a complaint, you can file an official consumer complaint with the Ministry of Government and Consumer Services.

Keep in mind, if you don’t answer the phone and the debt collector doesn’t leave a message it technically isn’t considered that they contacted you. Letters don’t count either.

If you want to stop collection calls, you can request that the creditor or collection agency no longer contacts you via phone, and that you should only be contacted by mail. Once you’ve stated you no longer wish to be contacted by phone, in most cases, they are no longer allowed to call you.

4. What Happens if I Allow the Collection Period to Expire?

While it might be tempting to simply buckle down and ignore the creditor until they are forced to go away, it isn’t in most people’s best interest. While creditors have a set amount of time to collect your debt, it can still haunt your credit report years after the matter seems settled. While a company may only have two years to collect money from you, the debt will stay on your credit report for anywhere from 6 to 10 years, depending on the debt and the province you're in.

These negative marks, including legal judgments and written-off credit card debt, will impact your ability to get credit moving forward. When a potential lender sees you’ve failed to pay off debt, they are less likely to extend you a line of credit or loan. Bad accounts basically tell lenders that you don’t take your repayment obligations seriously, and the reason for your lack of payment doesn’t matter to them.

Having many negative marks on your credit report can have a severe impact on your day-to-day life, even if you aren’t seeking credit. For example, a potential employer can run a credit check on you before making an offer, which is common in certain industries where bad credit is considered a red flag to employers in certain fields. Poor credit can prevent you from getting basic utilities, a mortgage, renting an apartment, or even buying a cell phone.


There are cases where some financial experts might advise older clients to wait out the debt collection period if they cannot pay back their debt, and they also have no need for credit in the future. However, it’s always best to speak to an unbiased professional, such as a certified credit counsellor, before making any kind of decision, just to make sure you’re not hurting your financial future.  

A counsellor can help you decide if paying off the debt and having it stricken from your credit record is a good idea, or if there’s a better, easier solution. They can also help you further understand your personal debt situation and guide you towards a debt-free life full of great financial possibilities. But whatever you do, don’t let that credit card debt keep you up at night and stress you out any longer. Contact Credit Canada today by calling 1.800.267.2272. All of our counselling is free! Trust me – you’ll be glad you did.

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