Canadian consumers are using their credit cards more and more, and the volume of new cards has jumped since last year, according to the latest report released Thursday by the credit analysis firm Equifax Canada.
Average monthly credit card spending increased by 17.5% in the first quarter of 2022 compared to the same period last year. The strongest increase in credit card spending, of 20.4%, was observed in Ontario, ahead of Quebec, where it increased by 18.4%.
In general, younger consumers have increased their credit card spending the most.
Rebecca Oakes, vice-president at Equifax Canada, explains these increases by the increase in travel following the easing of restrictions related to COVID-19 and by the meteoric rise in inflation.
As for the volume of new cards, it increased by 31.2% compared to the first quarter of 2021. During the first quarter of this year, the average credit limit granted to holders of a new card was more than 5500 $, the highest in seven years.
Year-over-year, the average credit card balance was up 9.5%, but Equifax Canada observed that credit card balances have not yet returned to pre-pandemic levels.
Fewer first-time buyers
Separately, multiple interest rate hikes and seasonality in the real estate market pushed new mortgage volumes down 13.2% this quarter from highs in the first quarter of 2021.
Equifax Canada says first-time homebuyers are feeling pressure from rising interest rates and first-time homebuyer volume fell 16.1% in the first quarter from the same quarter in 2021.