How much debt does the average Canadian carry?
The average credit card balance for Canadians in the second quarter of 2023 was $4,185, up from $3,909 in the second quarter, according to Transunion. And that is up from average monthly credit card spend of almost $2,447 in the third quarter of 2022, which is above the 17.3% from same time in 2021 and up 21.8% in 2019, according to Equifax. And from another report, Canadian consumer debt has risen to $2.4 trillion, with an average debt load of approximately $21,131—excluding mortgages. And Canadians are using credit cards more, as there was a 9% increase in credit balances in June 2023 compared to the same time last year.
This news, though unwelcome, is not unexpected according to some experts. Anne Arbour is the director of strategic partnerships at the Credit Counselling Society, an accredited non-profit charity that helps Canadians solve their money problems.
“When you combine the way the current pace of inflation is affecting everyday needs like food and gas, coupled with the impact of our post-pandemic spending on things like travel and entertainment, it is not surprising to see these numbers,” she says, adding that BoC interest rate hikes are compounding the issue.
“Recent jumps in interest rates are also affecting the disposable income of any consumer with a variable-rate loan or mortgage or line of credit, so it also makes sense that they might turn to using even more credit to help bridge the gap in their resources.”
According to consumer insolvency firm MNP Ltd, 59% of us are feeling the effects of these rate increases, and with an estimated two million Canadians renewing their mortgages within the next 12 months, more people are likely to feel the pinch.
“Credit card spending is reaching historically high levels,” stated Rebecca Oakes, vice president of advanced analytics at Equifax Canada, in a press release. “High consumer demand for credit cards means a competitive marketplace for lenders. As a result, the credit limits being offered on new cards are much higher than we’ve seen in previous periods.”
How long should it take to pay off credit card debt?
The answer depends largely on your own personal circumstances. How much can you afford to pay off monthly?
“What’s important for anyone to know,” says Arbour, “is their monthly capacity to make payments.”
Wondering if the $2121 credit card debit is the amount due past 30 days or just the balance. I pay off my credit card in full each month and is about $5000 balance. Is that use included in the average? Using a credit card that you pay off each month is a good use of “credit”.
Read and re-read the article, nowhere does it show how much credit card debt the average Canadian has. The article quotes $2447 as the average monthly credit card spend but does not indicate what portion of this amount is paid off each month versus debt carried over. To me, the true credit card debt that someone has is when they carry a balance past the due date – I would love to know what that average amount is so I can compare my money management versus the average Canadian.
With the average Canadian debt load at over $20,000 not including mortgages or credit lines or even auto loans it really makes me wonder how so many people can be living the high life.
I know the cost of living is high with crazy housing prices, high rents, out of control food prices and gas prices that change with the wind but why do people keep spending and take expensive vacations etc.
It seems like everyone today wants help getting out of debt when they knew that higher interest rates were coming but chose to ignore all the signs.
With two incomes and lower interest rates they just needed to jump in with both feet and get in way over their heads full well knowing that they were living well above their means.
Start budgeting and stop whining about things and do something about it. The Seniors and baby boomers that make up a large portion of our demographics are really hurting. Yes they may have their homes paid off but their living longer and have had to live with all off the rising costs of inflation just like everyone else and have had to live on a very limited income with minimal increases from time to time to their pensions. Take a look at the average pension income for pensioners. They can’t afford to upkeep their homes or pay for the rising costs in utilities and taxes. Do you hear them whining? Go into their homes and look in their fridges.
It’s time for this generation to to wake up and smell the roses. Stop whining start budgeting and stop living above your means. That may mean some big changes in your life but that is what life is all about. Stop asking for handouts from the banks and put more pressure on the federal and provincial governments to do something about the rising costs. If they had done something about this sooner we wouldn’t be in this situation. Remember the interviews at the gas pumps when gas prices were rising, the people would say,” you can’t really do to much about it “. Wow! The government doesn’t want to do anything about it because of the tax revenue and where is all of that money really going when you have double digit tax increases.
And believe me land developers, grocers and gas companies have never seen the kinds of profits that they have been making in this province since 1986, the year of expo.
GM