(Toronto) Canadians leaned more heavily on credit cards and other forms of debt in the third quarter as high inflation persisted, new data from credit bureau TransUnion shows.
According to the agency, 27.9 million Canadians held a combined outstanding balance of $2.29 trillion on active credit products in the third quarter of 2022, up 7.9% from last year. .
TransUnion says the number of consumers with an active credit account hit an all-time high in the third quarter of 2022, with participation growing fastest among Canadians born between 1995 and 2010, at a rate of 20.9% from a year to year.
More Gen Z consumers entering the credit market likely helped boost generational participation, TransUnion noted, while credit participation among older consumers actually declined.
The agency said non-mortgage debt, such as credit cards and credit balances, rose 2% from a year ago as the rising cost of living led consumers to rely more on credit.
Millennials saw their non-mortgage balances grow the fastest, at a rate of 13.3%.
Minimum monthly mortgage payments rose 9.3% year over year, due to rising interest rates, while minimum credit card payments rose 7.4%.
However, average credit card balances, while up from 2021, were down more than 6% from the third quarter of 2019 as balances declined during the pandemic. Credit delinquency levels, which were also down during the pandemic, are also trending back up toward pre-pandemic levels, TransUnion pointed out.
A consumer survey conducted by TransUnion found that households changed their spending behavior during the third quarter, reducing spending, increasing savings or paying down debt.