More Canadians making only the minimum payment on credit cards: TransUnion

TORONTO — Some Canadians are seeing their credit card balances climb as the cost-of-living crisis and higher interest rates take a toll on household budgets, a new report shows.

A TransUnion report says the number of Canadians paying just the minimum on their credit card rose eight basis points to 1.3 per cent compared to last year.

Matthew Fabian, director of financial services research at TransUnion Canada, says inflationary pressures can lead consumers to turn to bank cards or personal loans to help keep money at bay, and millennials and Gen Z consumers are no exception to this trend.

The report says total Canadian consumer debt was $2.38 trillion in the first quarter, compared to $2.32 trillion in the same quarter last year and only slightly down from a record high of $2.4 trillion of dollars in the fourth quarter.

The report says 31.8 million Canadians have one or more credit products, up 3.75 per cent year-over-year and mainly due to newcomers.

Millennials are said to now hold the majority of debt, while Gen Z debt balances have increased by 30% over the past year, mainly due to credit cards and personal loans.

This report by The Canadian Press was first published on May 28, 2024.

The Canadian Press