Bank of Canada Interest Rate Staying at 1.75% – What This Means for Credit Rebuilding
The Bank of Canada interest rate is staying at 1.75% for May 2019.
On May 29, 2019, the Bank of Canada (BOC) announced that its overnight interest rate is remaining at 1.75%, the rate it was set at in October of 2018.
In the announcement, however, the BOC stated that the Canadian economy appears to be picking back up in certain areas — such as consumer spending.
Job growth, business finances, the Canadian housing market, and consumer spending could all be stabilizing in the second half of 2019. The BOC will continue to monitor these trends. If all goes according to forecast, it’s possible that another interest rate increase could be on the way soon.
Increased Consumer Spending
According to the BOC, consumers are spending more money. While this is good for the economy, is it good for your bank account? It depends on your personal circumstances.
BNN Bloomberg recently reported that consumer insolvencies – people who filed for Bankruptcy or Consumer Proposal — reached the highest they’ve been in eight years in March of 2019.
Is spending more now because interest rates are lower the best decision for your financial future?
The question to ask yourself is if you can afford to pay all of your bills and debts with the 1.75% interest rate. If student loans, rental rates, credit card payments, and the like are already feeling like too much, what would happen if the Canadian interest rate increased again?
If it would put you into financial distress, now is the time to take a look at your budget and make a plan to get out of debt.
Opportunity for Credit Rebuilding
Now is also the time to start rebuilding credit. If you are currently carrying a lot of debt, your credit score may be hurting. With the interest rate on hold, you can start working on credit repair sooner rather than later.
This might look like:
- Filing for Bankruptcy or a Consumer Proposal now to ensure you don’t get even more into debt.
- Filing for a Consumer Proposal now to pause your student loan payments and deal with high-interest debts so you can put more money towards your student loans over time.
- Accessing a debt consolidation loan or home equity while interest rates are still lower.
- Working with a credit repair professional (like our advisors at Fuller Financial Solutions) to find the best budget and spending plan for you.
The next BOC announcement is scheduled for July 10, 2019. If your credit rating is already low, another BOC interest rate increase likely won’t make your situation any better. Take the time to look for solutions now while there are more options available.
At Fuller Financial Solutions, we recognize that no financial situation is the same. We take a unique approach to your debt and credit repair to find the best solution for you.
Contact us today for a free consultation. Call 416-927-7200 or visit www.fullersolutions.ca.