Posthaste: Canadians missing mortgage payments as credit card debt hits $113-billion record
Credit card debt ballooned to a new record in the third quarter as a higher cost of living squeezes Canadians and causes more people to miss loan payments, including their mortgages.
Money owed on credit cards climbed to a new high of $113.4 billion in the third quarter of 2023, up 16 per cent from last year, according to Equifax Canada’s latest credit trends report. More than six million new credit cards were opened in the past 12 months, Equifax said, an increase of 13.7 per cent from last year.
Overall, total consumer credit, which includes credit cards, mortgages, auto loans and unsecured lines of credit, hit $2.4 trillion in the third quarter. That’s a $80.9-billion increase from the same time last year, Equifax said.
Credit cards are becoming a go-to for many people struggling to cover mounting living costs fuelled by interest rates at 20 year highs. Equifax said a cooling economy is only adding to the financial difficulty.
“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,” Rebbecca Oakes, a vice president at Equifax Canada, said. “These factors are putting a strain on household budgets, making it difficult for many Canadians to make ends meet.”
Strong population growth is also contributing to higher credit card debt levels. New card holders increased by more than 1.3 million compared to last year. But credit card balances are also rising at a faster clip, suggesting financial pain is behind much of the growth in credit card debt levels, Equifax said. The average credit card balance climbed to $4,119 in the quarter, compared to $3,727 last year, higher than balances before the pandemic.
“Even if we take into
Read more on financialpost.com
