In addition to being used to facilitate retail purchases, credit cards are often used by consumers to finance essential living expenses; the continued increase in card balances is clearly a sign of the growing pressure on personal finances.
For financially distressed Canadian consumers with credit cards, auto loans and mortgages in their wallets, the credit card payments are generally the first that will be missed, as consumers prefer to keep payments on auto loans and mortgages in good standing if they are forced to choose.
According to Trans Union a significant milestone was reached in Q3-2019 with outstanding credit card balances exceeding $100 billion for the first time ever!
Meanwhile, the latest data from the Office of the Superintendent of Bankruptcy shows that in October 2019 Canadians filed the highest number of personal insolvencies in a decade. The last time the figure was this high was in September 2000 when 15,465 Canadians filed for insolvency.
The number of personal insolvencies has climbed almost 9 percent this year compared to the 12-month period ending Oct, 31, 2018.