(Toronto) Canada’s credit card debt skyrocketed in the last three months of 2022 amid rising interest rates and high inflation. We see that young Canadians in particular rely on credit to make ends meet.
Credit watch agency Equifax finds that Canadians’ credit card debt has increased more than 15% from the same period last year, topping $100 billion for the first time.
In its latest quarterly credit trends report, the agency notes that total consumer debt increased more than 6% in the fourth quarter of 2022 from the same point in 2021, with total debt reaching $2.37 trillion.
According to Equifax, the impact of rising interest rates has not yet been fully felt by homeowners as many have yet to renew their mortgages, but young Canadians are particularly hard hit by inflation.
Non-mortgage debt rose 5.4% in the fourth quarter, but among millennials, that debt rose 8.4%.
Mortgage-free consumers saw the largest increase in defaults in the fourth quarter, particularly among 18-25 year olds, who were nearly 31% more likely than a year earlier to miss a repayment, compared to a 17% increase for all consumers.
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