Running out of $$$... line of credit?
January 9, 2012 6:54 AM   Subscribe

Recently moved, unemployed, running out of money. Should I get a line of credit? (in Canada)

I recently moved back to Canada after living overseas for a few years. (female, late 20s). The move was very sudden, and while I had an ok amount of savings, the move was very expensive, as was the first few weeks of settling back into a cold climate (I didn't own a coat, boots, sweater, nothing.) I rented a room in a affordable apartment, and started applying for jobs within a few days of moving here. That was at the beginning of December, and while many jobs were being posted, I forgot about the holidays. Obviously most work places aren't going to be doing a lot of hiring at this time of year. (Acquaintances in the area told me they weren't even applying for anything until January, as no one was hiring). Only yesterday did I receive a reply (rejection) from the very first application I sent - IKEA - back at the end of November. So there's hope... I just think it'll be awhile.

Now I'm starting to run out of money. I have enough savings left for around one month's rent, metro pass, and food. I'm about to max out my credit card ($1500 limit, so it's not too bad). I'm starting to panic. I'm doing my best to apply to any and all jobs (I have zero retail/restaurant experience, but I'm applying for them anyways). I've responded to around 75 job ads so far, including restaurants, stores, call centers, temp agencies, fast food, kiosks, non-profits, day cares, etc. I'm applying to basically every job I find that I'm even slightly qualified for (I don't speak chinese, have a car, or have any advanced financial/computer degrees, and i'm not desperate enough for sex work.... so about 85% of the ads I see posted are moot). I've had two acquaintences pass on my CV plus a recommendation to their work place, with no luck.

Also, I'm suffering from my usual (only when stateside) depression and anxiety. Currently, most of this is caused by panicking about finances. This makes it extremely difficult to follow the usual job hunting advice of: get out there in person, and make calls. I don't have any friends in the province, and am only slowly beginning to meet people. I want to get out and do things that are good for my mental health (yoga classes, join a gym, meet-ups, etc), but they all cost money! Even the YMCA charges. I wouldn't mind taking walks outside, but I still haven't bought a winter coat, and Quebec winters are terrible. I often don't leave the house for days out of fear of spending money.

Ok. Sorry. That was a LOT of background info. My actual question is: Should I get a line of credit? I've always been reasonably responsible with my finances, and I never buy anything I can't afford. Store brand everything, only on-sale clothing, etc. I have no idea what my credit rating is, but I've had a credit card for about 4 years, and have made my payments on time all but 2-3 times. I kept a very low balance on it up until this whole moving continents fiasco. I've also had cell phones in Canada since high school, so there's a credit history.

Ideally, I'd like to get a line of credit, and just use enough to buy a coat, not have to worry about rent for a few months, and be able to go out and meet people and network. I'd like to be able to go to a meetup at a pub, for example, for both my own sanity, and possible job connections. I'd also like to buy some office attire for interviews, as my entire wardrobe consists mainly of yoga pants, shorts, tank tops, and hoodies. I will continue to send out resumes, and make follow-ups. Assuming I find a job within the next 3 months, I'd like to borrow between $1000-$3500.

Would it be a responsible thing to get a line of credit? Is there a better alternative? If not, I was planning on going down to CIBC in the next couple days to apply. Any and all advice is appreciated. If you have specific questions, I can memail you directly. Thanks!
posted by anonymous to Work & Money (25 answers total) 3 users marked this as a favorite
Don't go into debt or live on credit if you can possibly help it. If you are a Canadian citizen, you can apply for social assistance and possibly EI, so look into that. You may also be eligible for job search programs and assistance.

Find the best thrift shops in your area and check them once a week or so for a coat, warm clothing and work clothes. I have a number of really nice coats I bought secondhand for under $20.
posted by orange swan at 7:08 AM on January 9, 2012 [2 favorites]

As a last alternative, a credit line is better than living off credit cards. I just got a line of credit with RBC, and the deal is that it's a low interest rate, but it gains interest every day. So as long as you intend on paying it back asap then it shouldn't be a problem for you. Hopefully they will grant you one if it comes to that.

As for the rest of your woes, I think you should go volunteer for things like festivals and community programs - will get you out of the house, open doors to making friends/contacts for jobs, and will look good on the resume. Check Kijiji or whatever they use in Quebec for online classifieds to find a used coat.
posted by lizbunny at 7:13 AM on January 9, 2012

Without a known source of income, more borrowing is a very bad idea. Maybe I'm just biased because my aunt is now $30,000 in debt to her credit line with no apparent means to pay it back, and the interest is killing her. Using a line of credit to solve a cash-flow problem is one thing (you will have the money, but not right now), but relying on it for basic living expenses is very risky.

Without knowing your exact circumstances and needs, I can't really offer budgeting advice, other than the basic: first comes rent, then comes food (use food banks if you can - they are there for all of us when we need them). For clothes, and particularly for a coat, thrift stores. Value village at Bloor & Lansdowne has a great selection of winter coats that do not look second hand. My $35 coat from there has made my friend jealous.
posted by jb at 7:14 AM on January 9, 2012

If you have recently moved from overseas, it's unlikely you will qualify for EI.

Don't panic. It would be helpful to know where you are... Toronto? Montreal?

Anyway, having been in the same situation myself, I feel your pain. Things always seemed to work out though, so hang in there.

What you might think about doing is figuring out where you would like to work, and then phoning those places up. As a rule of thumb, it takes a month for every $10k in annual salary to find a job; if you're looking to make $100k a year, it will take 10 months.

So it might be best to start looking for survival jobs, as it will be quicker to land one.

Responding to ads is a waste of time - there will be a flood of applications. You will have more success with cold calling.

Before you take out that line of credit, spend 8 hours preparing for and conducting cold calls. Spend 2 hours researching, 2 hours preparing a pitch, and 4 hours calling.

You might be surprised at what you turn up.

I've been there (with a wife and kids to support as well!)
posted by KokuRyu at 7:15 AM on January 9, 2012 [3 favorites]

sorry - when you said "metropass", I thought you were in Toronto. Bloor and Lansdowne isn't going to help - but Goodwill/Value Village anywhere should have a decent selection of winter clothes.

For getting out: check for walking groups or other free activity?
posted by jb at 7:18 AM on January 9, 2012

Check out local charities, I am not sure about in Canada, but you are the sort of case that would most likely qualify for help there are organizations that help women get clothes for job interviews, they usually have a lot of donated suits etc also coats for winter even food banks you can use to help you save money. Try the Goodwill for clothes, that's what they are there for, go to free meet ups or events. I know it's hard to think that you might need these services but that is what they are there for use them, and then when you get a job make a huge ass donation back to them to say thank you.

See what services you qualify for, you are lucky enough to live in Canada which has a lot more services available than some countries, make sure you use them.

If you have family and friends let them know you are tight for money, it's amazing if you live in a cold climate how many people have perfectly good "old" coats, maybe they could lend you one.

I think borrowing on a line of credit would just add to your stress, you borrow the money and then can't pay it back imagine how stressful that would be.
posted by wwax at 7:32 AM on January 9, 2012

Please memail me if you live in Montreal, QC. I don't want to disclose information about my job because of privacy reasons, but message me so that I can let you know more about the job. It's an inbound call centre job, you would get paid much more than minimum wage, and it's easily accessible. There's also the main office which is located in Ontario.

If you have anything that you can sell for some extra cash then create ads on Kijiji so that you can just get any sort of money for right now.

Check out and apply for literally hundreds of jobs until someone contacts you back.

Contact cab companies in the area, they might be hiring and it would be a decent source of income for now. I think you might get paid earlier than bi-weekly and you would get paid in cash (from my understanding-my dad's a cab owner/driver so it might be different).
posted by sincerely-s at 7:33 AM on January 9, 2012 [4 favorites]

She said she was in Quebec, I'm assuming Montreal because of the English and the number of job postings.

Good luck anon. I've been there myself.
posted by dobie at 7:35 AM on January 9, 2012

I don't know where in Quebec you are, but I suggest not getting into more debt, but seeking out more services. Places like Women's Centre of Montréal (or whatever is similar close to you) may be able to help you with their Employability Development Services or even just their professional clothing kiosk. They may be able to refer you to a clothing bank, or other employment services, even if they're not the ones to help. Find out what assistance you can sign up for. Depending where you are, just looking up "Women's Services" could find you a list of places where you could, on one hand, volunteer - and on the other hand, receive assistance in finding employment. You don't necessarily need to be (for example) homeless or a victim of domestic violence to use certain programs. You do need to let go of any fears about the stigma.

But otherwise, you're still living like a privileged person. It seems like you want to coast for a little while longer, which is understandable after a stressful move. But it's like the boiling frog or ostrich affect or whatever metaphor you'd like - and you're not prepared for the weather, let alone being destitute. Start scrambling.

If you need to find even cheaper rent, start doing so while you have money for a deposit and time to get out of whatever rental contract you've made before you're in arrears. Go to pubs/meet-ups, but spend your money on one drink, water, and tips instead of many drinks. Go for walks (look for walking groups) or jog or go to PWYC classes instead of feeling you need a certain quality of exercise. Go to thrift stores for clothing. Use Freecycle. Quebec's Craigslist isn't as active as other places, but read and post there, and make a few flyers and offer to walk dogs for cash - even one dog walk a day is a day's eating, a beer at the pub, a coat, or what have you.

Have you anyone there who will give you a reference? Look over your CV? Help spur you on to visit the places you've applied to, or walk you through the no-fun things you need to do to not be afraid of your finances any more? And, if there's not much tying you there, do you need to be where you are? Would another area be any easier for you?
posted by peagood at 7:42 AM on January 9, 2012 [1 favorite]

What were you doing overseas? If teaching english then there are often institutes where you could look for a similar job in canadian cities. Why did you end up back in PQ? If it's to be near family and friends (as opposed to any other location) then can they help you? At least with the clothing? Debt spirals. Not to make you more anxious but it's true. Random jobs are hard to get- do you have previous applicable skills (can you tutor? Lifeguard? Hostess?) Or can anyone you know help you make connections in anyway?
posted by bquarters at 8:02 AM on January 9, 2012

I don't know much about credit in Canada, but there is something I can help with. It sounds like you're not getting any bites on your job applications. Feel free to MeMail me and I'm happy to look over and/or edit your resume as needed.

I respectfully disagree with the poster who advised cold calling for jobs. There is not a single person I know who likes getting a random call from someone they don't know who is trying to sell them something (e.g. themselves).
posted by juniperesque at 8:03 AM on January 9, 2012

Look into charities and government assistance first. You are the type of person that the general person wants to help. You want to work, you are trying to work, you just need a little help right now. You aren't taking advantage of any system. You aren't planning on needing help long term. Don't go into debt if you can help it. Also, it is difficult if not impossible to get a loan if you don't have a job, so that might not even be an option.

Best of luck to you. If nothing else, start going to church. God will provide you with a coat if you give Him the chance to.
posted by myselfasme at 8:20 AM on January 9, 2012

I don't have an answer regarding your specific question about a line of credit, but thought I could help with some suggestions about some problems you highlighted in your background info.

To get out of the house, sign up for Training Mobs - it's free to join and, whilst it does list classes that cost, it is easy to filter the results to include only free classes - there are quite a few, including yoga. This would be a great way for you to get out of the house, but also meet people as well.

The YMCA also does a sliding scale for people in need. I am not sure what the conditions are, or whether it requires some reciprocal volunteering, but I would definitely talk to someone at the YMCA about the options!

Prioritise getting a coat - as suggested above, look in second hand shops for something to get you through. Another option, which could be a long shot but is worth it just in case - place a wanted post on Kijiji! People might be doing some early spring cleaning, or getting rid of old coats to make room for new ones that they have bought on sale.

Once you have a coat, take the metro to a neighbourhood and walk around, looking for shops that have signs up looking for workers. I have seen recent signs up in Verdun and in Mile End - though I can't remember the specific shops off the top of my head. I will keep my eye out and report back any that I see.

Good luck and please feel free to memail me if you want (I live in Montreal)
posted by unlaced at 8:55 AM on January 9, 2012

OP, I hope you can contact jessamyn or another mod via the contact form so you can answer some of the questions people have asked here and maybe clarify what you have / have not done so far, where you are, etc.

Food: try Moisson Montréal (if that's where you are) as it's the biggest food bank on the island.

(And guys, I think it's a little late to offer coats. I'm reading the post to say that a basic set of winter clothing was purchased with the "OK" savings, which is one reason why current savings are so depleted.)
posted by maudlin at 8:57 AM on January 9, 2012

I thought the coat sounded like the most pressing problem

"Ideally, I'd like to get a line of credit, and just use enough to buy a coat"
posted by unlaced at 8:59 AM on January 9, 2012

The YMCA has an "access for all" policy that provides "scholarships" to people who can't afford membership. Here's the information page for the Quebec Y. You haven't been back in the country long, so I'm not sure if you can get a federal or provincial tax assessment that they ask for. It can't hurt to try, though, and if that doesn't work, maybe you can approach someone at your local center and see if they have any advice.

It doesn't look like Dress for Success has any locations in Quebec, but the Women's Centre of Montreal has job training programs specifically for women. They may be able to help you out on the job clothing front as well as the job search.

Depending on your skills and comfort level, you could make up some flyers to distribute in your apartment building and neighborhood offering babysitting or dog walking or yard work for some quick cash. A stack of black & white copies shouldn't put a huge dent in your savings. If you don't have a copy shop nearby, check your local library. Your library may also offer job search classes or services, so check that out if you can get there.

I have a few nice pantsuits and skirt suits I am about to donate to my local place, but I would be happy to send them to you if you are approximately size 12. They're in great shape since they've only been worn to interviews. MeMail me if you're interested!
posted by Fui Non Sum at 9:10 AM on January 9, 2012

Ack! You're right! (Who could go through a Montreal December/January without any kind of coat?)
posted by maudlin at 9:11 AM on January 9, 2012

Oh, love, no one is going to give you a line of credit if you don't have a job. You can try, but I've had LOCs with two different financial institutions (BC and ON) and both required last year's tax return and a statement of employment. They are also not eager, in my experience, to give you a line of credit for living expenses. The loan officer when I first applied was nice enough to coach me along until I said I wanted to buy a new computer rather than "I just want to have it" which was the real reason.

Perhaps your experience at CIBC will be different, however, and I suppose it doesn't hurt to apply.

In the event that you do get a line of credit, bear in mind you will have to make minimum monthly payments on it, the way you do with a credit card. You can't just use the $3500 to pay your rent, buy food and a bus pass and then pay it back three months later when you find a job. Once a month you are going to have to pay back a portion of what you owe (in my case it was 10%). You also need to have a plan for what will happen if you don't have a job three months from now, are $5,000 in debt and having to make $500 payments every month. For that matter, you also need to have a plan for when you do find a job and have to make $500 payments every month. If that sounds like an impossible thing based on what you project your income will be, then really think long and hard about taking on that much debt.

Living off credit is not a great strategy for the long term, but you won't be the first person to do it. If you already had the line of credit, you probably wouldn't think twice about using it when in a financial bind. What's more dangerous, in my opinion, is to already be working at full capacity and then use credit to finance a lifestyle beyond your means.

In the mean time, and in the event that you cannot get a line of credit, you should be applying for social assistance. They may also be able to help with a coat and direct you to help with the job search. This is exactly what welfare is for and you do not have to be completely penniless to apply, in case that's what you were thinking. There are lots of different programmes here that would be helpful to you, I think.
posted by looli at 9:29 AM on January 9, 2012 [1 favorite]

Kijijj is more used than craigslist. Freecycle is sometimes helpful. Youth employment services can also help and they have outlets all over the city. There are all sorts of free classes - my friend goes to a free hot yoga class - and the Montreal movie meetup group often has free movies at the dollar cinema. (i am assuming this is your location. If so, feel free to mefi mail me if you want a stranger to buy you a hot drink.)
posted by jeather at 9:44 AM on January 9, 2012

Can't help with the line of credit, but I also have a decent coat you are welcome to if it fits (size smallish - I'm 5'4" 120lbs). I'd be happy to buy you lunch this week, could meet you downtown. MeMail me if you are interested!
posted by Cuke at 11:48 AM on January 9, 2012

[Folks, nothing personal and it's sweet to offer to help but direct offers of cash are not okay here, creates an environment that we can't manage. Sorry.]
posted by jessamyn (staff) at 12:23 PM on January 9, 2012

Having previously worked in retail lending for a major bank, one mentioned above, I can tell you right now that their lending policies require employment or some form of taxable income in order to lend you money, especially on a line of credit.

Even when that FI had so called "pre-approved line of credit", if they found out you were unemployed or retired - that "pre-approval" would be rescinded.

I now worth for a credit union, and their lending policies are very similar, although I no longer work as a lender.

YMMV, but I wouldn't expect it to vary much.
posted by smitt at 1:16 PM on January 9, 2012

I respectfully disagree with the poster who advised cold calling for jobs. There is not a single person I know who likes getting a random call from someone they don't know who is trying to sell them something (e.g. themselves).

Do you have a better way of finding a job?
posted by KokuRyu at 2:19 PM on January 9, 2012

It depends on the credit score you had before you moved away, but its unlikely you could get a line of credit. Things have changed in the past 2-3 years, and the banks are more reluctant to give out lines of credit. (I work at a large Canadian financial institution, and have experience in this area.)

If your credit score is fantastic, and you've maintained a relationship with a bank or credit union here, you might be able to pull it off. Typically, though, they'll ask for income and possibly documentation.

This is less true for a credit card. The interest rate is higher, so you have a better shot of getting your credit card limit extended.

Overdraft on your chequing account can be even easier to get.

Yep, the rates are high, but if you need some cash to get you though, those are the ways to get it.

As for your employment situation, you might try the employment agencies. (Manpower, Spherion, etc.) This is especially true if you speak another language. (Toronto + spoken french = near instant job.)

I completed a successful job search this past fall. I didn't do any cold calling, but I did show up, professionally dressed, resume in hand, elevator pitch memorized, at the employers I wanted to work for. It took about 15 visits to various employers, but eventually a manager reccomended me to HR, and I got an interview and job. This never would have happened without putting myself in front of people who could help. A friend who worked at reception at one of the staffing agencies would often give applicants pre screening interviews, and french language evaluation if they showed up looking the part.

It's the worst time of year to look for a job in restaurant or retail. All the holiday hires are seeing their hours cut back. If you have one of these employers really high on your list, by all means persue it, but don't spend all your time on employers in these categories.

Good luck!
posted by thenormshow at 7:06 PM on January 9, 2012

Just to follow up - Metro St Hubert, on the corner of rue Boucher and rue St Hubert, which is very close to Laurier metro, has a sign up looking for a cashier, and people for the deli. I would go in person and have a chat to them! I am not suggesting it would be a long term career option, but it could tide you over for a time!
posted by unlaced at 7:20 AM on January 10, 2012

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