Article content
Ontario dominates the list of cities with the highest per capita levels of credit card debt in Canada, with Barrie taking the top spot, according to a new analysis by Money.ca, an online financial resource.
Barrie, Ont., residents have an outstanding credit card balance of $3,521.54 on average
Ontario dominates the list of cities with the highest per capita levels of credit card debt in Canada, with Barrie taking the top spot, according to a new analysis by Money.ca, an online financial resource.
Article content
The study looked at data from Canada Housing and Mortgage Corp. and found that of the 10 cities with the most credit-card debt, seven were in Ontario. To get the findings, the company compared the total outstanding credit-card debt against the population in each census metropolitan area, and calculated the average amount of debt per capita.
Advertisement 2
Article content
Residents in the top 10 cities had, on average, outstanding credit card balances between $3,264.93 and $3,521.54 each month.
Barrie residents had the most credit-card debt, at $3,521.54, with Toronto not far behind in third at $3,428.63.
The full top 10 ranking is as follows:
Residents of Trois-Rivières, Que., had the least amount of outstanding credit card debt.
The report points to the recent spike in living costs as one reason households may feel strapped for cash.
“Most people will use short-term forms of credit, like credit cards, when trying to solve an immediate cash flow problem,” Romana King, senior editor at Money.ca, said in a press release. “There’s nothing wrong with using a credit card for an unexpected expense. The key is to have a plan on how you will pay back that borrowed money.”
Posthaste
Article content
Advertisement 3
Article content
She added that while credit cards can be a powerful tool to help create a credit history and boost a credit score, they also have a downside.
“Digital transactions and the interest charged on borrowed money can add up, sometimes very quickly,” she said. “People can get stuck in a cycle where they never pay down what they owe and barely pay the interest. This can lead to a cycle of debt.”
Many Canadians don’t seem to have a choice, however, with most using credit cards to cover essential purchases, according to a separate study by NerdWallet Canada, a personal finance company.
The 2024 Canadian consumer credit card report, which surveyed 1,044 adults in April, found that 69 per cent have used their credit cards to pay for essential goods and services like groceries and utilities over the last 12 months. Of those, about 31 per cent did not pay their balance in full each month.
Over half of respondents, 53 per cent, also said that their credit card habits changed over the past year, with the most common reason being higher prices for goods and services.
“With credit card use on the rise for basic needs, many Canadians appear to be feeling the pinch of higher prices,” Georgia Rose, credit card expert at NerdWallet, said in a press release.
Advertisement 4
Article content
Currently, 55 per cent of those surveyed have credit card debt — a jump from 43 per cent last year — and 51 per cent of them believe it will take them six months or longer to pay it off.
“Treating your credit card like cash is a good rule of thumb. If you hesitate to use your debit card for the transaction, think twice before you put it on credit,” Rose said.
Sign up here to get Posthaste delivered straight to your inbox.
Average fixed mortgage rates tiptoed slightly lower this week, but the leading offers didn’t budge. The belle of the ball is Toronto-Dominion Bank’s hidden 6.19 per cent (benchmark prime minus 101 basis points) variable-rate promo. To date, no other lender has publicly matched this offer and it’s scheduled to end May 14, writes Robert McLister. Find out more.
Advertisement 5
Article content
Recommended from Editorial
Most discussions around retirement focus on how much money you need to save to live comfortably in your post-work years, and how much you can withdraw annually from your investments without too much risk. These are questions that both aspiring retirees and their financial advisers strive to simplify. The problem is there is no universal method to determine the answers, and the guidelines may overlook other important considerations. Here’s why your retirement plan may be different than you expected.
Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you wondering how to make ends meet? Drop us a line at aholloway@postmedia.com with your contact info and the general gist of your problem and we’ll try to find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course). If you have a simpler question, the crack team at FP Answers led by Julie Cazzin or one of our columnists can give it a shot.
Advertisement 6
Article content
Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Read them here.
Today’s Posthaste was written by Noella Ovid, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.
Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com.
Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.
Article content
