Please stay on our and read all the latest information on Average Credit Card Debt on Canadians in 2024: Numbers Will Shock You.
Average Credit Card Debt on Canadians in 2024
The average credit cardholder debt increased dramatically in the third quarter of 2023, according to a data from Equifax Canada. This trend was predicted to continue into 2024. Due to rising interest rates, consumer debt and credit delinquencies are increasing, which is contributing to the growth in Canadians’ credit card debt rates.
At $113.4 billion, Average Credit Card Debt on Canadians in 2024 reached a new record high. That figure indicates a 16% rise from the previous year. Additionally, the survey discovered that 6 million new cards—a 13.7% increase—were opened in the previous 12 months.
According to credit counselors, such consequences should get worse over the next several months and years. In this post we are going to discuss in detail about Average Credit Card Debt on Canadians in 2024. We will further discuss its potential reasons and solutions.
Average Credit Card Debt Numbers Will Shock You
TransUnion reports that in the third quarter of 2023, Canadians had an average credit card amount of $4,265. For Canadians as well, credit card debt is rising. That amounts to $4,185 from the second quarter and $3,909 from the first quarter of the same year.
It is almost double from the average debt of $2,447 in 2022. Thereby, making it one of the biggest balance in past few years
A different analysis states that, excluding mortgages, consumer debt in Canada has increased to $2.4 trillion, with an average debt load of about $21,131. It is also evident that Canadians are using credit cards more frequently—credit balances increased by 9% in June 2023 over the same month the previous year.
Reasons for Average Credit Card Debt
It also makes logical that consumers with variable-rate loans, mortgages, or credit lines would resort to taking out even more credit to help close the gap in their finances, as recent increases in interest rates are also having an impact on their disposable income. Many variables, such as the growing expense of living, rising interest rates, and the slowdown in the economy, are contributing to the rise in credit card debt.
An alarming increase of Canadian delinquencies is also highlighted in the Equifax report. A quarter of Canadians—up from a quarter of the previous year—did not make a payment on at least one product. This translates to an additional over 139,000 customers who haven’t made their payment. The total percentage of non-mortgage delinquency increased by 29.2%. The fastest-rising provinces were Ontario (35.4%) and British Columbia (34.5%).
While many may view “buy now, pay later” as an easy, temporary fix—buys often incur no interest for the first six weeks—people risk going over budget if they employ multiple plans from various suppliers. Extended plans should be avoided since they include interest rates as high as thirty percent.
It is suggested that anyone experiencing difficulties paying off credit card debt or with their mortgage rates get in touch with their financial institutions to see if they can provide any assistance or help them choose the best course of action for paying off their obligations.
Our further recommendation is nonprofit credit counseling if you’re having trouble finding a balance transfer card with a low interest rate to help you pay off your credit card debt. These organizations can assist in negotiating a repayment schedule with creditors, frequently resulting in rates of 7 to 8% spread over 4 to 5 years.
Think about raising your income and cutting back on non-essential spending as well. Assuming a part-time employment, offloading superfluous stuff, or reducing wasteful spending are a few examples. Both your financial and emotional well-being can be severely impacted by debt. Hence, you must always try to keep reducing lowering its amount.
We are extremely happy that you found this post on Average Credit Card Debt on Canadians in 2024 worth reading till the end.