TORONTO, Canada—The rising costs of goods and services is driving consumers in one country to place more small and large on their credit cards, a new report shows.
The study by Equifax Canada found the practice is driving Canadians into debt as balances begin to outpace the ability to pay credit off, CBC reported.
The report states that in the most recent quarter, credit card balances rose to their highest level since the final quarter of 2019. There was a 6.4% increase in credit balances between the first and second quarters this year — and people are buying more credit cards, too.
"Overall consumer debt is on the rise," said Rebecca Oakes, vice-president of advanced analytics at Equifax Canada. She added that an increase in non-mortgage debt was one of the more enlightening trends to emerge from the report, CBC noted.
‘Already at Risk’
"We all know that house prices have been going up over the last couple of years … some mortgage debt has also increased, but it's really that non-mortgage component part that we're interested in right now," she added.
Consumers who have a low credit score and are already at risk of missing payments are among the most likely to have seen a shift in credit balance. For those with a credit score lower than 620, there has been a 16.2% increase in their credit balance since the second quarter of 2021, CBC stated in its analysis.
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