Average Canadian Credit Card Debt

This is the average Canadians credit card debt
Average Canadian Credit Card Debt
Article Overview

Many Canadians struggle with credit card debt on a regular basis. If you’re having trouble paying off your credit card debt, you’re not alone. The following tips will help you manage your debt and get back on track.

Average Canadian Credit Card Debt

The average Canadian owes $2,121 on their credit cards according to the most recent Equifax survey. This sum might not seem like much, but when you take into account the costs and interest rates associated with it, it can soon mount up and become a burden.

When it comes to paying off credit card debt, it really varies from person to person. Factors such as your debt level, income, and spending habits all play a role. However, it could take anywhere from a few months to a few years to pay it off on average. Making only the minimum payments will take longer and cost you more in interest charges. However, if you can pay more each month or pay it off in full, you can get out of debt faster and for less money.

Average Canadian Credit Card Debt by Age Group

Because different sources may report different numbers based on varying factors such as location, income level, and spending habits, there is no one definitive answer to the question of the average Canadian credit card debt by age group. However, based on available data, here are some rough estimates:

  1. Young adults (18-24): The Financial Consumer Agency of Canada (FCAC) reported that young Canadians aged 18 to 24 had an average credit card balance of \$930 in 2019.
  2. Millennials (25-34): In 2019, Canadians aged 25 to 34 had an average credit card balance of $2,090, according to the same FCAC report.
  1. Generation X (35-54): According to a Financial Post survey, Canadians aged 35 to 54 owed an average of $8,764 on credit cards in 2019.
  2. Baby boomers (55+): According to the same Financial Post poll, Canadians aged 55 and up had an average credit card debt of \$6,239 in 2019.

It is important to note that these figures are only estimates and may vary due to a variety of factors such as regional differences and changes in the economy or consumer behaviour. Furthermore, keep in mind that credit card debt is only one component of a person’s overall financial situation and should be viewed in the context of their income, savings, and other debts.

5 Ways Canadians can Get Out of Credit Card Debt

Here are 5 ways Canadians can get out of credit card debt fast:

  1. Make and stick to a budget. Understanding your income and expenses is essential for debt management. Collecting your spending information from your credit cards and bank accounts from the past 3 months is sufficient, but if you can do 12 months, it will be even more ideal. Make a list of all your monthly expenses and see where you can save money. This will give you more money to put toward debt repayment.
  2. Make a larger payment than the minimum. The minimum payment is simply the amount required to keep your account in good standing. However, paying only the minimum means that you are only covering the interest and that your debt will never be reduced. Moreover, the outstanding amount will continue to accrue interest everyday. Credit card interests are exorbitantly high, usually more than 22% per year. To make a dent in your debt, try to pay more than the minimum amount each month.
  3. Consider obtaining a debt consolidation loan. If you have several high-interest credit cards, a debt consolidation loan can help you combine all of your debts into one monthly payment with a lower interest rate. This can help you manage your debt better and save money in the long run.
  4. Use your credit cards sparingly. Try to limit your daily expenses to cash or debit. This will keep you accountable for your spending and keep you from adding to your debt.
  5. Seek the advice of a financial advisor. If you’re feeling overwhelmed by your debt, talk to a financial advisor. They can assist you in developing a debt repayment strategy and provide advice on how to get your finances back on track.

Remember, managing credit card debt takes time and effort, but with a little discipline and a solid plan, you can get out of debt and stay debt-free.

FAQ

The average Canadian owes $21,128, according to the most recent Equifax report, up 2.4 percent from the previous year.

$5,800 is the average credit limit on new cards based on a recent report by Equifax Canada.

The average debt for a 35 year old is $16,832, which includes credit cards and lines of credits.

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Written by:

Jim Pan, CFP, MFA-P

Jim is a dedicated, fee and advice only independent Certified Financial Planner with a focus on supporting healthcare business owners during their crucial growth phase. His expertise lies in offering comprehensive solutions to minimize taxes while embracing a holistic approach. With a career spanning back to 2010, Jim has established a strong presence in the financial industry. He proudly holds a range of designations, including Certified Financial Planner (CFP), and Master Financial Advisor - Philanthropy (MFA-P). He is currently pursuing additional designations and qualifications to better serve his clients and community. Beyond his qualifications, Jim is a member and an esteemed participant in the Million Dollar Round Table (MDRT), an exclusive global association comprising the top 1% of financial advisors. Jim's commitment extends to the community, where he spearheads numerous charitable fundraising events and plays an active role in enhancing the well-being of others. Additionally, he has contributed significantly by serving on the board of the Canadian Mental Health Association in Vancouver. Currently, he volunteers with Junior Achievement of British Columbia (JABC) to present personal finance topics to youths.

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