Credit card balances hit a record high in the second quarter of this year, according to the latest data from Equifax Canada, even as Canadians pull back on spending amid high cost of living.
Equifax Canada’s Market Pulse report on consumer credit trends, released on Thursday, said card balances reached an all-time high of $107.4 billion in the second quarter of 2023, while total consumer debt in Canada reached $2.4 trillion.
Even with those sky-high figures, the report noted that heightened borrowing costs are causing consumers to be more hesitant on spending overall.
“Canadians are demonstrating a shift in their spending habits due to the current economic volatility,” Rebecca Oakes, vice president of advanced analytics at Equifax Canada, said in a press release.
"Non-mortgage debt continued to grow in the second quarter, largely due to substantial growth in credit card balances and a notable increase in debt among subprime and deep subprime consumers,” the report said.
Credit habits varied across household types.
Mortgage holders and high-income segments showed the most slowdown in credit card spending, as they have more flexibility to scale back on discretionary spending to meet their increased credit payment obligations.
Meanwhile, consumers with depleting savings are facing an uphill battle when it comes to higher inflation and other expenses, resulting in a continued uptick in credit card debt, Oakes explained. 
The average credit card balances per credit card consumer have risen by nine per cent, with the largest increase seen in lower credit score segments, up 13.7 per cent year-over-year, the report showed. 
Credit card spending as a whole has been consistently growing since the end of 2021. But is finally starting to slow, the report said, due to slowing inflation and rising financial pressure from high interest rate credit products. 
“Consumers are becoming more prudent with their credit related decisions,” Oakes said.