As Canadians continue to feel the financial squeeze from rising monthly bills, credit card debt has reached a record high, according to a new Equifax report.
The average credit card balance held by Canadians at the end of September hit $2,121, helping Q3 to become the sixth consecutive quarter with increased credit card use. The total average non-mortgage debt per person came to $21,188 in September -- a level not seen since the first quarter of 2020.
It comes as no surprise then that Canadians are increasingly worried about their ability to keep up with payments, with half of the consumers surveyed by Equifax expressing that they are not comfortable about their personal economic outlook -- up from 39% just one year ago. When it comes to keeping up with month-to-month bills like rent, utilities, and insurance, 52% of respondents said they were concerned, with adults over the age of 65 being more concerned (73%) compared to adults aged 18-34 (40%).
“No matter where they live in Canada and no matter how old they are, people are clearly concerned about their financial situation,” said Julie Kuzmic, Equifax Canada’s Senior Compliance Officer, Consumer Advocacy. “Credit card usage is reaching historic highs. This can be a slippery slope for some, as it doesn’t take long to find yourself burdened by debts, which may become challenging to pay back in this economic environment.”
These precarious financial situations are causing stress for many Canadians, with 53% reporting they experience a lot of anxiety about their current level of personal debt. Interestingly, people in Atlantic Canada and British Columbia had the most anxiety while Albertans reported the lowest levels.
When it came to concerns about job security and ability to pay off debt, residents of Quebec expressed the highest levels for both while Alberta residents, again, reported the lowest levels.
One area where Canadians have seen their bills jump the most is at the grocery store, and to combat this, nearly 60% of respondents said they are using coupons and looking for deals more on their groceries compared to last year. And an eye-opening 54% reported cutting back on grocery shopping altogether. The report also found that women were more likely to engage in both of these cost-saving measures compared to men.
Housing has undoubtedly been another major financial stressor in Canadians' lives, with 17% of those surveyed saying they are contemplating moving to another part of the country to save on housing costs. Additionally, 14% of respondents said they may need to move in with a family member to cut down on costs. Unsurprisingly, renters are more likely to be the ones considering this compared to homeowners.