TORONTO, Nov. 6, 2013 /CNW/ - Today the Canadian Federation of Independent Business (CFIB) and debt crusader Gail Vaz-Oxlade launched a new campaign to encourage Canadians to give their credit cards a break for one day a week. Credit Free Friday calls on Canadian consumers to help small businesses, and themselves, by paying with Interac Debit or cash when they shop on Fridays.
"Small businesses are finding it increasingly challenging to absorb the high fees they are charged by the credit card companies and banks," said CFIB president Dan Kelly. "Very few consumers know that $5-7 billion each year in credit card processing fees is embedded in the cost of everything they buy, and with ever-higher tiers of premium cards hitting the market, that cost is only going up. As consumers are often unaware that the merchant loses between 2-3.5% of a credit card sale, Credit Free Fridays can be a great way to support small firms."
The other side of the credit card issue is that it is also adding to record-high levels of consumer debt. Recent data from Statistics Canada shows that the average Canadian now has approximately $27,000 in consumer debt, not including mortgages. Credit card debt specifically totalled close to $74 billion Canada-wide in November 2012 - over $2,000 per capita. The proliferation of credit card reward programs encourages consumers to use their cards more often, without always thinking of the consequences.
"Just because you have a $5,000 limit on your credit card, doesn't mean you can afford to rack up that kind of debt," said Vaz-Oxlade. "When you pay with debit or cash, you know that you can only spend what you have. If you're chasing the points and carrying a balance, those points are costing you big time. And if you can't go one day a week without using your credit cards, you have to wonder how the credit card companies trained you so well!"
Federal NDP Consumer critic Glenn Thibeault is a big supporter of the campaign, and encourages Canadians to participate. "Credit Free Friday is a great way to get consumers thinking about how their choice of payment can affect their personal finances and small businesses," said Thibeault.
The launch was held at Wanda's Pie in the Sky, an independently owned bakery in Toronto. In addition to calling for a weekly credit card holiday, the campaign gives small business owners tools that they can use to gently encourage customers to think about how they pay. There is also an interactive social media element that asks Canadians to get creative with ways to put their credit cards on a timeout. More details are available at www.creditfreefriday.ca.
The Canadian Federation of Independent Businesses (CFIB) has 109,000 small- and medium-sized businesses as members across Canada. With regional offices all across Canada, CFIB provides advice and support to help small businesses grow and succeed. CFIB has been the leading voice calling for changes to the credit card industry in Canada.
About Gail Vaz-Oxlade
Gail Vaz-Oxlade is the well-known host of TV hits such as Til Debt Do Us Part, Princess, and Money Moron, and author of multiple best-selling books on money management and investing. She is recognized for her no-nonsense approach to finance and has helped thousands of Canadians get in touch with their money and what they want it to do for them. Gail is loved by millions for her irreverent style and unique ability to make the most complex of financial topics accessible to all.
SOURCE: Canadian Federation of Independent Business (CFIB)
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