Credit card debt rose for a third consecutive month in February, according to Statistics Canada.
Credit card debt issued by Canada’s chartered banks increased by 1.45%, or $1.3 billion, during February, while non-mortgage loan debt grew by $2.8 billion.
On a yearly basis, consumer debt throughout Canada gained 14.5% in February, while balances on home equity loans stood at $170.5 billion, said Statistics Canada.
Canadians are taking on debt as they spend more on travel, dinning out and buying alcoholic beverages.
A separate report from credit reporting agency TransUnion found that credit card usage in Canada surged by 20% year-over-year in the fourth quarter of 2022.
There has also been an increase in new credit cards issued, which is being driven by demand among young adults and newcomers to Canada.
Newcomers to Canada accounted for 85% of new credit cards issued in Q4 2022, said TransUnion.
The amount of outstanding balances on credit cards in Canada is now at a record $2.32 trillion, according to the TransUnion report.
TransUnion added that moderating interest rates and a strong labour market should enable most Canadians to continue servicing their debts.
