One of the greatest benefits of participating in Synergy Merchant Services' cash advance program is the avoidance of an accruing interest rate. Without having to worry about a balance accumulating interest, business owners across Canada may rest assure that they will never find themselves in a position where their account is in default.
Late payments and their associated fees are non-existent. Being considered “past due” is unheard of. Since attaining a merchant cash advance does not involve credit, a business owner's credit score does not become affected. If only the program could be extended to the every day consumer.
Alas, that is not the case. Today, The Canadian Press reported that, unfortunately, a startling majorityof Canadian credit card bills are going unpaid, pushing cardholders into a state of delinquency. According to the report, nearly 60 per cent of Canadian credit card debt is being written off by issuers of the credit.
Citing a report from the quarterly Moody's Canadian Credit Card Index, The Canadian Press reveals that the number of delinquent accounts, which are determined by payments that are 30 days past due, rose by 23 per cent in the April to June period of this year, compared to the same time last year.
Evidently, the increasing financial stresses brought on by the global recession continues to take its toll on Canadian credit card users. Charge-offs when a creditor gives up on collecting past due debts by charging them off its books are reaching an all-time high.
Currently, the charge-off rate is at 4.8 per cent, a 57 per cent jump from the 3.07 per cent rate achieved in last year's second quarter. According to Moody's: “The intensity of the current recession has led to charge-offs that have exceeded previous cyclical highs by a relatively wide margin.”
Even more harrowing is the realization that the ever-increasing charge-off rate is simultaneously increasing along with Canada's unemployment rate at 8.7 per cent, as of August.
Moody's expects that Canada's rate of unemployment will hit 9.6 per cent by 2010's second quarter. Not surprisingly, the charge-off rate is expected to rise along with it. Needless to say, this only means more Canadians will be developing worse and worse credit.