Consumer Debt

7 06 2011

Article 1, 2


1. If you were Prime Minister of Canada, what would government do to help Canadians reduce personal debts?

2.If you had any of these three debts (student loans, mortgage debts and credit card debts or a combination of three debts) which one would you choose to pay off first? And explain?




10 responses

8 06 2011

I would choose to pay off my credit card debt first, as it has the highest intrest rate. As well student loans are excpected to be paid off after a few years of graduating since there could be thousands and thousands of dollars to be paid. Finally a mortgage can take 25 years to pay off, so it would not be at the top of my list.

8 06 2011

1) First of all the government should have a limit for lending, so that people wont borrow too much that they can’t even pay off. Secondly, the government should make sure that they lend money to people who can afford, and have different limits depending on their ability (income levels) of paying back the money they borrowed. I believe, this is the one of the best methods to help Canadians from borrowing more. The governent can’t really help the Canadians to reduce their debts. In addition, they can lower the interest rates, so that the debts can be affordable. But over all the best method it havig a limit.

8 06 2011

I dont think governments should intervene in the personal debts. since a lot of people in our economy especially at this state are under huge debt and if the government helped everyone get out of debt, the government themselves will be in debt.

and as for which debts i would pas off first. i would choose to pay of my credit card debt because the interest rates on that are enormous then the student loan, as you get out of university you have about 6 months to pay off without interest and after that they do add interest but it is a very low rate. and finally mortgage debt is very common and it takes 20-30 years for average Canadians to pay off and is not that big of a problem

8 06 2011

1) In order to reduce consumer debts, the government can implement grants and lower interest rates. Grants are a great way for the government to give away billions of dollars to those who are looking for financial aid. When interest rates get lower, consumers have more borrowing power and it would help lower their financial burden and increase consumer spending.

8 06 2011

2) You would pay off the debt with the highest interest first and then work your way into paying the others in the order of high to low interest. Credit card debt is usually the highest interest rate of 20% or more. The student loan would be second and part of the interest is tax deductible. The mortgage has a very low rate of interest and there is no rush to pay it off quickly and plus it is amortized over 25 years.

8 06 2011

1. I dont think the government should directly intervene with personal debt. The people should be reasonable when they are talking out loans and borrowed reasonably. The government should not help with these people because they may or can make the same mistake for the future. However, what i believe is that the government can lower interest rates of existing debt in order to help the individual pay the debt back but without he enormous interest added on top of it.
2. First of all mortgage should be the last one to pay. This is because mortgage usually takes longer time to pay off so there is a less of a burden to pay it off immediately. Then it would probably be the student debt. I say this because it is not high in interest as in the credit card debt. And last and finally i would pay off my credit card bills, because once i see those interest rates on the bills i would probably pass out 8X;; Anyways those are the order i would pay off at.

8 06 2011

I think there should some system in place where only those who qualify can receive loans. What I mean is that only those who have good credit ratings and valid reasons for borrow may receive the loans. For example, starting up a business or pay off vehicle lease/maintenance. Loans should be given to those who really need it.

Maybe the government should use things like tax credits and instead of giving people their money back, it would be contributed to a debt you have. (By law that is) So you have no choice on how to use the money.

Honestly loans are given to anyone these days. Its the citizens fault for taking advantage of this and the low interest rates. This is also the governments fault for not setting any kind of strict rules when borrowing money.

8 06 2011

The government should intervene with personal debt. One of the main reasons that we cannot successfully get out of this recession is because of the decreased spending due to the massive amount that many households are burdened with. If we do nothing about this, then consumer spending will very slowing recover as people manage to pay off all their debt. If our goal is to stimulate the economy, then less debt is a must. Thus, if possible, subsidizing part of the consumer’s debt will hasten period in which all debt will be paid and consumer spending may rise once again. After this has been done, I believe that regulations should be put into place so that people cannot fall this much into debt again.

8 06 2011

2. If I had a combination of all 3, I would choose to pay of credit card debts first simply because they have the highest interest rate. In terms of mortgage vs student loans, I believe that I would pay off student loans first because mortgage debts are more flexible in the long run. Getting my student loan paid off first would allow me to make adjustments for my mortgage loans in the long run to pay it off efficiently.

9 06 2011
Maria Li

2) In my opinion,student and mortgage loans are meant to be paid off in the long run and has more reasonable interest rates. Credit card debt, however, must be paid off as soon as possible because the rates are very high. Also, student and mortgage debts are usually large sums of money that is not easy to pay off.

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