Three ways the everyday Canadian can save money in a recession
New data from TransUnion shows Canadians leaned on credit cards and other forms of debt more in the third quarter as high inflation persisted.
TransUnion says 27.9 million Canadians held a combined outstanding balance of $2.29 trillion on active credit products during the third quarter of 2022, up 7.9 per cent from last year.
The agency says the number of consumers with an active credit account reached a record high in the third quarter of 2022, with participation growing the fastest among those born between 1995 and 2010 at 20.9 per cent year over year.
TransUnion says more generation Z consumers entering the credit market likely helped drive the generation's participation up, while credit participation among consumers on the older end of the spectrum actually declined.
It says non-mortgage debt such as credit cards and credit balances increased by two per cent from last year as the higher cost of living led consumers to rely more on credit.
Millennials saw their non-mortgage balances grow the fastest, at 13.3 per cent.
Monthly minimum mortgage payments were up 9.3 per cent year over year as interest rates ramped up, while credit card minimum payments were up 7.4 per cent.
However, average credit card balances, while up from 2021, were down more than six per cent from the third quarter of 2019, as balances were down during the pandemic. Credit delinquency levels, which were also down during the pandemic, are trending back up towards pre-pandemic levels too, TransUnion says.
A consumer survey by TransUnion found that households were shifting spending behaviour during the third quarter, reducing spending, building up savings or paying down debt.
This report by The Canadian Press was first published Nov. 29, 2022.