Fewer Canadians are paying down credit card balances as the cost-of-living crisis and interest rates continue to pressure mortgage payments and day-to-day expenses, a report suggests. A Visa card is seen in Portland, Ore., Wednesday, May 15, 2024. THE CANADIAN PRESS/AP-Jenny Kane
TORONTO – Some Canadians are seeing their credit card balances grow as the cost-of-living crisis and higher interest rates eat into household budgets, a new report shows.
A TransUnion report says the number of Canadians paying only the minimum amount on their credit cards was up eight basis points to 1.3 per cent compared with last year.
Matthew Fabian, director of financial services research at TransUnion Canada, says inflationary pressures may lead consumers to turn to bank cards or personal loans to help make ends meet, and millennials and Gen Z consumers are no exception to the trend.
The report says total consumer debt in Canada was $2.38 trillion in the first quarter, compared with $2.32 trillion in the same quarter last year, and down only slightly from a record $2.4 trillion in the fourth quarter.
The report says 31.8 million Canadians hold one or more credit products, up 3.75 per cent year-over-year, and mainly driven by newcomers.
It says millennials now hold the largest share of debt, while debt balances among the Gen Z cohort surged 30 per cent compared with last year, mainly driven by credit cards and personal loans.
This report by The Canadian Press was first published May 28, 2024.
