Lower savings rate, higher credit card debt signals pandemic savings have been spent: Matt Davison
A new survey says Canadians are leaning more heavily on credit cards amid persistent inflation and rising interest rates.
Equifax Canada's consumer survey released Tuesday found the average credit card balance held by Canadians was at a record high of $2,121 by the end of September.
Equifax says average non-mortgage debt was $21,188, returning to levels not seen since the first quarter of 2020.
Canadians are feeling less secure in their financial outlook than last year, and more than half are worried about paying regular bills like rent, utilities or insurance — especially adults aged 65 and older.
More than half of Canadians surveyed said they have a lot of anxiety about their personal debt levels.
Equifax Canada’s Julie Kuzmic says the previous average credit card balance high was during the fourth quarter of 2019, at $2,118.
She says average credit card debt fell during the pandemic, but credit card utilization has now increased for six consecutive quarters.
“Credit card usage is reaching historic highs,” said Kuzmic in a statement Tuesday.
She said that increased credit card usage will be a “slippery slope” for some, as debt may be harder to pay back in the current economic environment.
More than half of respondents said they are looking for deals at the grocery store more than last year, or cutting back on grocery shopping altogether.