Debt is increasing fastest among younger Canadians.
With wages continuing to lag behind inflation, Canadians – already among the most indebted in the world – are taking on more credit card debt.
According to Equifax, overall Canadian credit card debt surged 15% in Q4 of 2022.
“Canadians’ credit card debt increased by more than 15 per cent from the same period a year earlier and totalled more than $100 billion for the first time, according to credit monitoring agency Equifax.
Overall consumer debt rose in the fourth quarter of 2022, with total debt at $2.37 trillion, up more than six per cent from the same period in 2021, the agency said in its latest quarterly credit trends report.”
Canadians under 35 had the largest increase in credit card debt.
Rebecca Oakes – Vice President of advanced analytics at Equifax – said things are tough for many young Canadians:
“They’re starting to struggle a little bit. And the challenge is, inflation isn’t coming down fast enough,” she said.
“They’re relying on the credit card more, and they’re maybe starting to miss payments a bit more.”
That was further shown by the breakdown of rising delinquencies.
Overall, delinquencies on credit products rose 17%, but among Canadians age 18-25 delinquencies rose over 30%.
The unfortunate reality is that this situation won’t change until Canada sees real increases in economic productivity. And that won’t happen until there is a significant shift away from the high-tax economic policies that have held back investment and have disincentivized private sector growth.
Spencer Fernando
