COVID-19: Managing financial health in challenging times

If you’re receiving benefits by Government of Canada cheque, you may cash your cheque for free. Usually, you can cash a cheque that is $1,500 or less, at any bank even if you’re not a customer. However, the Government has temporarily increased the limit to $2,000 for emergency benefits-related cheques to individuals, such as the Canada Recovery Benefit (CRB). You must simply show acceptable identification to the teller such as a passport or driver’s licence.

Learn more about cashing a Government of Canada cheque.

You can also deposit your cheque in person at any bank branch, using an ATM or by mobile device. However, the bank will put a hold on the money. Depending on the amount, you may have to wait between 5 and 8 business days before accessing the money.

Learn more about depositing a cheque with your mobile device.

If you're thinking about using a payday loan company or cheque-cashing outlet, this will cost you money. These companies usually charge a percentage of the amount that is being deposited plus a flat fee. For example, if you cash a $1,000 cheque, you could be charged 2.99% of the value of the cheque, plus $2.99 for each item you cash. This means that after fees, you'd only get about $967 instead of the full $1,000.

Learn more about the costs of payday loans.

If you're having trouble paying for your ongoing expenses or foresee challenges in keeping up with your regular payments, visit your financial institution’s website. Be proactive and look at the options that your financial institution is proposing.

See the web pages developed by the six largest banks in response to Covid-19.

Banks in Canada are closely monitoring developments related to COVID-19. If you’re facing short-term financial issues, your bank might be able to help. Some banks have announced measures that include the opportunity for relief on certain credit products. Other banks might be open to waive certain fees or delay payments.

Note that some banks have additional measures in place to support seniors and people with disabilities. These measures may include flexible hours of operation, prioritization in the queue and assistance with certain transactions.

See the latest news on how banks in Canada are taking action.

If you’re having problems making your mortgage payments because of the COVID-19 situation, you might be eligible for a mortgage deferral.

Mortgage deferral

A mortgage deferral allows you to pause your mortgage payments for a defined period of time. Interest will continue to be charged on the amount you owe and will be added to your balance. When the deferral period ends, you have to resume your payments. 

Your financial institution determines how you repay the skipped payments and interest. For example, your financial institution may add the skipped payments and interest to your regular payments once they resume. This means your payments could be higher than before the deferral period. As an alternative, your financial institution may ask you to pay the deferred payment amount and interest at the end of your mortgage term. Make sure you understand your financial institution's mortgage deferral terms and conditions. 

Note that mortgage payment deferrals typically focus solely on your mortgage. It may not affect other payments regularly withdrawn, like property taxes and optional credit insurance.

If you have emergency savings, you may want to consider using them before considering a mortgage deferral.

Learn more about mortgage deferrals. 

How to apply for a mortgage deferral

Visit your financial institution’s website for the latest information on mortgage deferrals. If you decide to use this option, ask your financial institution about the costs and terms and whether this can impact your credit report.

If your mortgage is insured with the Canada Mortgage and Housing Corporation (CMHC), you can contact a mortgage professional for assistance. They can determine what options you have and help you find a solution for your specific situation.

Understand mortgage payment deferral on the CMHC website.

If you expect to continue to experience financial hardship once your mortgage deferral period ends, consider your options now.

Read your mortgage contract and speak to your financial institution about the options available to you. You may be eligible for one, or a combination of the options offered by your financial institution. Keep in mind that if you make changes to your mortgage contract, you may have to pay fees.   

Financial institutions look at situations on a case-by-case basis.

Find out more about mortgage relief options. 

During the COVID-19 pandemic, many financial institutions allow the deferral of payments on credit products, including mortgages and credit cards. Financial institutions approve payment deferrals on a case-by-case basis.

Deferring payments on a mortgage, credit card or any other credit product should not negatively affect your credit. Canada’s two credit bureaus, Equifax and TransUnion confirmed that payment deferrals won’t affect your credit rating. 

Review your credit reports. Make sure the deferrals approved by your financial institution have been properly reported to the credit bureaus. It could take up to one month for information to appear on your credit reports. 

You can order your credit report with Equifax and TransUnion, free of charge at any time. 

When reviewing your Equifax credit report, look for one of the following indicators next to your deferred payments: 

• deferred payment plan 
• affected by a natural or declared disaster 

The payment status should be "Paid as agreed and up to date" and you should see the amount of $0 or "n/a" in the "Payment Amount and Delay" field.

For TransUnion, look for the letter "D" in the "Terms" field related to the deferred payment.

For more information, visit the credit bureaus’ COVID-19-related web pages:

• Equifax
• TransUnion

Learn how to fix an error on your credit report. 

A HELOC could potentially be a good replacement for emergency savings, under certain circumstances.

Find out more about HELOCs.

Many Canadian banks are offering consumers who are experiencing financial hardship as a result of COVID-19 the possibility of temporarily reducing the interest rate on their credit cards. Many also offer deferred payments for a period of up to six months.

Terms and interest rates may vary depending on the financial institution. Contact your financial institution by using its online portal, telephone banking service or by booking an appointment to determine if you are eligible. Otherwise, your monthly payments and interest rates will remain the same.

The Bank of Canada strongly advocates that retailers continue to accept cash. However, some consumers and businesses have stopped using cash to limit potential exposure to COVID-19.  

If you’re using your debit card more frequently to avoid cash transactions, review your monthly transaction plan. Be aware that if you go over the number of transactions in your monthly plan, you may have to pay fees.

Several payment card network operators have increased their per-transaction limits for contactless credit transactions since the start of the pandemic. Contact your credit card issuer to find out if your limit has changed.

Debit and credit card transactions can be done using the:

• magnetic swipe and your pin
• chip and your pin
• secured TAP payment

If you are being affected by the pandemic and need assistance, you may be able to get a refund on certain bank charges.

These can include fees for:

• insufficient funds (NSF)
• stop payments
• Interac e-transfers
• monthly transaction plans

Contact your financial institution for more details.

Visit the Account Comparison Tool to find the account that best suits your needs.

During this uncertain period, try to avoid borrowing additional money as much as possible. Research shows those who often use credit to pay for daily expenses because they have run short of money have lower levels of financial well-being.

If you must borrow money, make sure you understand the cost of different credit products before you make a decision, and borrow only what you need.

Certain credit products are more expensive than others due to their high interest rates and fees. For example, a payday loan should be your absolute last resort, as they often carry very high fees.

Make sure you compare all borrowing options and their fees, interest rates and repayment terms before choosing a credit product. Otherwise, contracting new expensive credit now could create more financial problems for you in the future.

Learn about what to consider before borrowing money.

If you are having trouble making ends meet, seek advice from reputable sources to explore the financial options that are available to you. You can contact a financial professional, such as a licensed financial advisor or an accredited credit counsellor, to discuss a plan. If you choose a financial advisor, make sure they are licensed.

See what you should know before choosing a financial advisor.

Be cautious when searching for the right professional who can help you. Some companies offering to help to pay off debt or repair credit are misleading consumers.

See what you should know before getting help from a credit counsellor.

Having a budget is key, especially when an emergency occurs. In order to manage your budget, you need to identify your income and expenses. It’s also important to identify your needs versus your wants during a specific period.

The Budget Planner is an interactive tool that provides tips, suggestions, guidelines and alerts. It can help you determine whether you have the funds to meet your ongoing financial commitments and where you could cut expenses.

Use the Budget Planner to create and manage your budget.

An emergency fund is money you set aside to pay for unexpected expenses. In general, it’s recommended that you save the equivalent of 3 to 6 months of your regular expenses.

If you don’t currently have an emergency fund, consider putting some money aside right now if you can afford it. Depending on how the situation evolves, you may need to rely on an emergency fund sooner than expected.

If you’re already experiencing financial hardship and can’t afford to start or maintain an emergency fund, contact your financial institution. They could recommend specific products or services, like a HELOC, a debt management plan or accessing funds in your registered retirement savings plan (RRSP), to help you get through these difficult times.

Learn how to set up and manage an emergency fund.

Your financial institution might have to close branches temporarily. Online, mobile, ATM or telephone banking may become necessary for making financial transactions. Make sure you have your login information and passwords or your financial institution's phone number handy.

Learn more about online banking.

If you usually go in branch to pay your bills, consider setting up pre-authorized debits instead. Pre-authorized debits are automatic and convenient when you want to make payments from your account on a regular basis.

Learn how to set up pre-authorized debits.

• never click on links or attachments in unsolicited or suspicious emails
• never give out your personal or financial information by email or text
• note that financial institutions will never ask you to provide personal, login or account information by text or email
• when banking online, enter your financial institution’s website address in your browser yourself
• beware of questionable offers related to cures, if it seems too good to be true, it probably is
• if you have concerns about your insurance coverage, contact your insurance company directly
• if you need information on the COVID-19, refer to a trusted source such as the Government of Canada’s COVID-19 page

Find out how to protect yourself from malware.

Remember that if you didn’t initiate contact with a person or a business, you don’t know who you are dealing with.

The Canadian Anti-fraud Centre has more information on scams and tips related to COVID-19 to help protect yourself from fraud.

Find out about the current reported scams related to COVID-19.

Learn how to protect yourself when banking online.

Know what to do if you’re a victim of fraud.