Families and under-55s feel the sharpest squeeze as spending outpaces caution
Nearly one in four Canadians expect to make only the minimum monthly payment on their credit cards, a sign of growing strain on household budgets.
An Equifax Canada survey of more than 1,500 people found that 25 percent of respondents expect they will only afford minimum monthly payments, while another seven percent believe they are likely to fall behind.
Fifty-six percent expect to pay their balances in full each month.
Forty percent report spending more overall than a year ago, more than double the 18 percent who are spending less.
“The results point to mounting financial pressure for many households,” said Rebecca Oakes, vice-president of advanced analytics at Equifax Canada.
The survey found that 29 percent of respondents are using credit and savings to manage everyday expenses, while 35 percent are cutting back on future contributions and expecting to make only minimum payments.
“When these pressures begin to overlap, households can lose financial flexibility quickly,” Oakes said.
The pressure is reaching essential spending, with 29 percent using more credit than a year ago to cover groceries, utilities and other basics, 23 percent drawing on savings for day-to-day costs, and 20 percent leaning more heavily on credit cards and lines of credit, according to the survey.
Thirty-five percent have reduced contributions to savings, investments or education funds, 44 percent worry they are not saving enough for retirement, and 41 percent are concerned about unforeseen emergency expenses.
Discretionary budgets are tightening as well, as 67 percent have cut entertainment and leisure spending and 40 percent have trimmed personal care.
Borrowing behaviour is turning more cautious, the survey indicates, with 60 percent actively avoiding new debt and only eight percent opening new credit cards or taking on new loans.
Financial confidence has weakened over the year for 29 percent of respondents, while 23 percent feel more confident and 47 percent feel about the same.
Julie Kuzmic, head of consumer advocacy and compliance at Equifax Canada, said making only the minimum payment can feel like a way to manage through a difficult month, but that balances “can take much longer to repay and cost considerably more in interest.”
She urged anyone watching balances climb with little prospect of repayment to review their obligations, prioritize due dates and explore options with lenders or a reputable credit counsellor.
Households with children are under greater strain, with 51 percent spending more than a year ago compared with 35 percent of those without children.
Those with children are also more likely to use more credit for essentials, at 42 percent against 24 percent, and more likely to expect they can only make minimum payments, at 33 percent.
Respondents under 55 show sharper pressure than older Canadians.
Thirty-six percent of those under 55 are using more credit for essential expenses than a year ago, double the 18 percent recorded among those 55 and older, according to the survey.
Only 47 percent of Canadians under 55 expect to pay their credit card balance in full each month, compared with 69 percent of those 55 and older.
