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With the higher cost of living, more Canadians are relying on credit for everyday purchases and becoming saddled with more debt than ever before.
NerdWallet Canada’s 2024 Canadian Consumer Credit Card Report found 69 per cent of Canadian adults used credit for essential purchases in the past year, with 31 per cent of respondents indicating they don’t pay off their full credit card bill each month.
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Additionally, more than half of respondents say they have credit card debt, with 51 per cent indicating it will take at least six months to pay off.
The higher cost of living also emerged as the top factor among the 53 per cent of Canadians whose credit card habits changed in the past year, with other major causes being unexpected big purchases, change in employment and higher housing costs.
A report from Equifax in 2023 found Canadians are facing $116.2 billion in credit card debt alone as total consumer debt hit $2.45 trillion.
“The increase in credit card debt is being driven by several factors, including the rising cost of living, higher interest rates, and the economic slowdown,” Rebecca Oakes, vice-president of advanced analytics at Equifax Canada, said in a news release at the time.
“These factors are putting a strain on household budgets, making it difficult for many Canadians to make ends meet.”
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This NerdWallet report echoes earlier data from TransUnion Canada, which found 31.8 million Canadians are using at least one credit product, and Gen Z credit balances have spiked some 31 per cent.
“Inflationary pressures may lead consumers to turn to bankcards or personal loans to help make ends meet, and Millennials and Gen Z consumers are no exception,” Matthew Fabian, director of financial services research and consulting at TransUnion Canada, said in a news release.
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