Read the fine print before using credit card balance transfers'

Despite the latest Bank of Canada interest rate cut, more Canadians are turning to their credit cards to pay for essentials, piling on debt in the process.

- SRIVINDHYA KOLLURU

If you can achieve it, consolidating your debt to a lower rate of interest is going to work out to your benefit in the long run.

More than half of Canadian adults - 55 per cent - have credit card debt, up from 43 per cent in 2023, according to a recent poll from NerdWallet.

Credit card delinquencies are also on the rise as fewer consumers are able to pay their balances off in full, according to a recent report from credit bureau Equifax Canada.

In struggling to deal with the problem, some Canadians are now using "balance transfers" to manage nonmortgage debt. While this can give you some short-term breathing room, you need to be cautious.

Abalance transfer is the process of moving your outstanding nonmortgage debt from one or more credit cards to another card with a lower interest rate. Standard credit card interest rates of almost 21 per cent in some cases can be punishing for consumers.