A new survey finds over half (53%) of British Columbians are concerned about the impact of rising interest rates on their financial situation.
“After repeated interest rate hikes this year, and the potential of more to come, it is understandable that more than half of British Columbians remain concerned about what the impact will be on their finances,” says Linda Paul, a licensed insolvency trustee with MNP, which commissioned the Ipsos poll.
Paul says those who are financially vulnerable and struggling to make ends meet may not be able to cut back their budgets any further if interest rates continue to rise and make debts more unaffordable.
“Any future interest rate hikes could push households in B.C. that have already slashed their expenses and shaved off as much as they can from their budgets to take on additional debt to keep up with their bills. The cost of servicing that debt will also become more expensive as rates rise, making it even tougher to pay back those debts,” explains Paul.
“Those who are using debt to pay off their other debts should seek professional help from a licensed insolvency trustee before their finances spiral beyond their control.”
Aside from bankruptcies, trustees can also provide personalized debt advice and help with informal debt settlements with creditors.
“Sometimes, those smaller expenses on your credit card can go unnoticed, but be aware that they can really add up. Your monthly subscriptions such as TV streaming subscriptions, app subscriptions, music subscriptions and cloud services, for example, can be sneaky,” says Paul.
The survey also found 84% of British Columbians plan to be more careful about how they spend.
As British Columbians tighten their budgets, one-quarter (26%) say they are better equipped to absorb an interest rate increase of one percentage point than they used to be, up six points from last quarter.
“More British Columbians than last quarter believe they are in a better place to deal with an interest rate increase, but we should recognize that they are still in the minority. There are many who may not fully understand how a rate increase can impact their finances,” says Paul.
Six in 10 say that they are already beginning to feel the effects of interest rate increases.
Those who are more concerned about their ability to pay debts has remained relatively stable, at 51% (-2 pts).
And 48%, (-1 pt) say that if interest rates go up much more, they will be in financial trouble.