Canadians Relying More On Credit As Consumer Prices Rise
New data from credit bureau TransUnion shows that Canadians are relying more on credit cards and other forms of debt as consumer prices remain elevated across the country.
TransUnion reports that 27.9 million Canadians held a combined outstanding balance of $2.29 trillion on active credit products during this year’s third quarter, up 8% from the same period of 2021.
The agency said the number of consumers with an active credit account reached a record high in Q3, with participation growing the fastest among people born between 1995 and 2010 at 21%.
Credit card minimum payments were up 7.4% year-over-year, according to TransUnion.
TransUnion added that non-mortgage debt such as credit cards and credit balances increased by 2% from last year as the higher cost of living led consumers to rely more on credit.
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Millennials saw their non-mortgage debt grow the fastest, at 13% year-over-year.
Monthly minimum mortgage payments increased 9.3% from a year ago as interest rates continue to rise to dampen inflation that is at a 30-year high in Canada.
A consumer survey conducted by TransUnion found that Canadian households are shifting their spending behaviour this year, reducing expenditures, building up savings, and paying down debt.