Here’s a simple fact: almost everyone has debt of some kind. Whether because of loans for education, our cars, or our homes, nearly all of us carry debt we need to manage responsibly. Too often, people are too embarrassed about their debt to get the help they need to properly manage it. And that’s how debt can pile up.

Check out these tips for managing debt. They’ll help you to manage your spending, reduce what you owe and learn to ask for assistance if and when you need it.

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Imagine being debt-free. If your debts were paid off, you could have more money available to save for retirement, emergencies or vacation. You might also get access to better interest rates when you do need a loan. Most importantly, you could stop worrying about how to make ends meet and enjoy more peace of mind.

A budget is simply a sum of money needed or available for a particular purpose. If you've never used a budget to manage your financial needs, now is the time to start. Just follow these steps 

  • track your spending to see where the money goes, relative to your income.
  • find out how much you need each month to make all your payments.
  • make as tight a budget as you can and stick to it.

The trick is to manage debt so that payments are always well within your means. Try to budget debt payments (other than rent or mortgage) at no more than 20% of your monthly income. Then you can enjoy the advantages and flexibility of credit-without the worry.

Once you have a budget and know how much you have available to spend, use it effectively for controlling your debt. Here are some suggestions 

  • pay more than the total minimum payment due. Even a little more each month can help reduce your debt faster.
  • if you have more than one credit card, after you make the total minimum payments due on all your cards, pay the credit card balance with the highest interest rate first-you'll save money over the long run.
  • consider a balance transfer or debt consolidation loan—but only if you can save on interest and avoid getting into more debt.
  • stop using credit cards for non-essential purchases—just say "no" when you don't have the available cash.
  • cut back on your expenses like in restaurants and entertainment. Learn to use discount stores, wholesale clubs and coupons. Also, learn to negotiate with vendors-not every price is set in stone.
  • earn more income with a part-time job, hold a yard sale or barter your talents for goods and services
  • use unexpected money such as gifts or tax refunds to pay down your debt.
  • talk to your creditors-depending on your financial situation, they may have suggestions or options available to help reduce your debt.
  • don't be afraid to seek professional help if you need it. Visit External resources for credit counseling assistance in Canada.

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Maybe you've had some major credit trouble in the past and you'd like to find a way to start fresh. Or maybe you never realized you had a credit problem until you were turned down for a loan or had your rate increased on an existing credit card. All of these situations can be signs of a credit problem.

You can't fix the problem until you know what it is. Therefore, your first action should be to get a copy of your credit report from a credit reporting agency. Visit External resources for links to their sites.

Review your credit report carefully and mark every suspected error. If your credit report includes incorrect information, contact the credit reporting agency immediately. They will review your report, investigate your claim, and make the correction if one is called for.

Even if the negative items are true, you can still make things better. If the entry refers to an unpaid debt, contact the creditor to negotiate payment options. If there has been a dispute, you can ask the credit reporting agency to add a note to your credit report explaining your side of the story.

The good news is that, as you improve your credit habits, most of the negative entries may eventually fall off your report over time. This is more the reason to start as soon as possible managing your credit effectively.

If you are experiencing financial difficulty it is in everyone's interest to get it resolved. Call our (Customer Assistance) team at 1-800-404-1319. The earlier you contact us the sooner we can work out a solution.

If your life circumstances have changed, such as unexpectedly losing your job or becoming ill, check your statement to see if you have Balance protection on your account. If so, your repayments could be covered.

Besides MBNA, you can also get free help and advice from a wide range of External resources.