Give yourself the gift of a debt-free Christmas

 In Opinion

Dear Money Lady, I check my credit all the time – do you think it will drop in December?

Dear Ken,
December marks the time of year when Canadians spend the most, whether it be on food and household goods or of course on the Christmas season of small gatherings (due to COVID) and family gift giving.
Spending more shouldn’t drop your credit Ken, unless you plan on not paying it off in full and carrying a debt balance into the New Year.
One thing we did not anticipate for this year end was the higher level of inflation which will hit everyone’s wallet now and into 2022.
According to a survey conducted by Equifax Canada, 64 per cent of Canadians checked their credit reports in the past year.
“While there are still a lot of worried people, it’s encouraging that consumers are taking the time to better understand their relationship with credit,” said Julie Kuzmic, Equifax Canada’s Senior Compliance Officer, Consumer Advocacy. 
Credit has always been something most Canadians use during the month of December and this year will be no different, in fact it will most likely be a necessity. Although we have recovered most of the jobs lost during the depths of COVID, unemployment is still too high, and this will make it extremely difficult for many Canadians this Christmas season.
Supply chain problems have pushed up the costs for companies and now limited the supply of everyday goods. Add to this the high prices we are seeing at the pumps for gas, it is understandable to see inflation numbers higher than expected, now at almost five per cent (the fastest increase since 02/2003).
People that will be hit hardest this season are those with low or fixed incomes whose earning have stayed stagnant, meaning their purchasing power has dropped considerably with the price increases. When disposable income becomes tighter it is not long before it begins to force people to reach back to credit to sustain their lifestyle.
Be very careful here. Carrying balances on credit month over month forces you to fall into a revolving credit cycle and overtime this will drop your credit rating. As well, if you exceed your credit card limit from time to time, this will also drop your score. To learn more about how credit works, you can visit the Equifax Canada Education Hub.
My husband has recently had issues with his credit and used Equifax to monitor his score, (they send him updates and emails when it changes). He had a dispute with a credit provider that was eventually rectified, however the incident literally dropped his credit score by 70 points. Even though it was not his fault and the credit provider relinquished, the damage had already been done. Cyber crime and credit fraud have all been on the rise since COVID. It is good to see that Canadians are now a lot more credit savvy, they want to be in-the-know, and even though we are going into the “spend season” I know most Canadians will still be conservative with their credit.
So rather than go deeper and deeper into debt this Christmas, why not celebrate the true meaning of the season. It is the one time of year that we are supposed to “give of ourselves, to think of others, and bring happiness to other people.” It really isn’t supposed to be this commercialized version that retailers want, where you shop till you drop or burn up the computer keys with on-line shopping. Yes, we want to support local, but you know there should be a limit. Why not give yourself a gift this year, do not go into debt. Have no credit to pay in the New Year. Now that’s a great gift!

Christine Ibbotson is the author of three finance books and the Canadian Best-Selling Book “How to Retire Debt Free & Wealthy.” Visit or send a question to

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