Canadians have an average credit card debt of $2,627
20 March 2019
Many Canadians use a credit card to manage their finances. They’re convenient, help you build a credit score and can earn you points. However, they’re also easy to abuse and their use can result in a downward debt spiral. With that in mind, let’s take a look at the state of Canada’s credit card use.
The majority of Canadians have a credit card. In 2017, 89% of Canadian households reported having at least one credit card, according to the Bank of Canada. The data also found credit card use is on the rise, with the number of Canadians reporting they have a credit card increasing by 7% from 2013 to 2017.
The number of Canadians reporting rewards as a feature of their credit card is also on the rise – up 11% over the same four years. This is in line with findings from the Canadian Bankers Association, which discovered rewards programs are a priority for 82% of Canadians when selecting a credit card. It also found that almost three quarters (72%) of Canadians carry at least one credit card with a rewards program.
While more and more Canadians have been reporting rewards programs as a feature of their credit card, there’s also been an increase in reports of annual fees. From 2013 to 2017 there was a 16% increase in Canadians who reported their main credit card had an annual fee. Interestingly, over the same time period there was a small drop in those reporting that they had a low or high interest rate.
Credit card debt
The average credit card debt in Canada is $2,627. Studies suggest around 47%-58% of Canadians pay off their credit cards in full each month. However, one of the studies, by TransUnion Canada, found 39% are uncertain about the benefits of paying off more than the minimum balance.
Studies suggest 15% of Canadians have a credit card spending limit under $2,000, while 41% have a credit card spending limit over $10,000. Of all household debt, credit cards account for just 5.3%, according to the Canadian Mortgage and Housing Corporation. Yet when represented as a share of scheduled monthly payments, this number jumps to 14.6%.
Credit card payments
Given their ease of use, credit cards continue to be a popular form of payment. Overall in 2016, credit card POS transactions totalled more than $462 billion. Payments.ca reported that one in four remote bill payments and routine household expenditures by consumers used credit cards. The dominant retail categories for credit card spending include groceries/drugs (39%), gasoline (51%), healthcare (6%), durable goods (58%) and personal attire (64%).
Credit card fraud
The Canadian Bankers Association puts the total financial loss due to credit fraud at $800 million. From 2008 to 2014 they reported the number of accounts that faced credit card fraud increased by 71%. They also found data breaches on credit cards were twice as likely to take place than identity theft and that the median amount stolen via credit card fraud was $300.
Almost one in five surveyed by CPA Canada said they were aware that they had been the victim of credit card fraud. In fact, 39% of Canadians are so worried about their accounts being compromised that they refuse to use their card in some cases. The same survey found 58% of Canadians cover the pinpad when entering their bank or credit card password and 86% review their banking transactions once a month.
Your credit card
Thinking about opening a credit card account or just want to make sure you have the best deal? Check out our comprehensive credit card guide.
Susannah Binsted is the international PR manager at Finder. Susannah has a Bachelor of Communication and a Bachelor of International Studies from the University of Technology Sydney.
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