How Do Your Customers Fit into the New Average Canadian Debt levels?

The recent Equifax Canada Market Pulse Quarterly Credit Trends Report provided insight into the increase in consumer reliance on credit card spending and debt. The rise in average consumer credit card monthly spending jumped by 17.5% in Q1 of 2022 compared to Q1 of 2021. The reason behind this climb in consumer credit spending is due to the easing of COVID restrictions which has released pent-up demand and increased travel. These two factors combined with inflation have led to some of the highest increases in credit card spending. 

Let’s delve into the average debt levels for Canadian age groups, discuss the increase in credit spending and the growth of total consumer debt. 


Average Debt Levels for Canadian Age Groups 

Not including mortgages, the average debt for Canadians was $20,744 in Q1 2022. This average debt is an increase of 1.54% from Q1 2021 and 0.28% from quarter-on-quarter. Breaking down consumer debt by age group:

  • 18-25 had an average debt of $8,129. They also had the highest delinquency rate of 1.37%.

  • 26-35 had an average debt of $16,832. This is a 2.83% increase year-over-year. 

  • 36-45 had an average debt of $25,084

  • 46-55 had an average debt of $31,442  

  • 56-65 had an average debt of $26,165 

  • 65 and older had an average debt of $14,386 


Increase in Credit Spending 

The growth of credit active consumers is back to pre-pandemic levels with younger consumers entering the market. There has been a 3.1% increase in consumers under 26 using credit in Q1 2022 with Gen Z and Millennials showing the biggest increase in credit card spending. Factors that could be contributing to this increase are the higher costs of living, the rebounded employment levels which now exceed those of February 2020, and the higher savings that occurred during the pandemic lockdowns. 

A greater reliance on credit cards and increased spending could lead to missing payments amongst consumers. Inflation is at a 30 year high, decreasing the purchasing power of consumers. Recent interest rate hikes have not had any impact on inflation so far, but consumers who took on more debt during the pandemic may start to feel the financial stress as monthly payments increase alongside the growing interest rates. 

Future trends to monitor would be growth opportunities with those new to Canada. Canada has planned to welcome approximately 1.2 million immigrants between 2021 and 2023. New-to-Canada consumers often get a credit card as their first product. 80% of New to Canada consumers are scorable within 4 months of credit file creation and 80% of them score 660 plus. Understanding this viable target market could increase credit customer growth and retention for lenders. 


Growth of Total Consumer Debt

Over the past 12 months, total consumer debt reached $2.3 trillion, an increase of 8.6% in Q1 2022. The increase in non-mortgage debt is driven by credit cards, HELOCs and installment loans. Despite the growth in consumer credit spending and debt, the delinquency rate for Canadians decreased year-over-year by -15.66% to 0.88% for Q1 2022. 

Debt levels are increasing as credit activity continues through the increased credit card spending due to inflation, a decline in the housing market from interest rate hikes, and financial stress across consumer segments. Understanding the average debt of various age groups and their trends can aid your lending decisions. 

We want to help Canadians live their financial best. To learn more about understanding our consumer credit and debt trends, please contact your Equifax Account Representative. You can also reach us directly at 1-855-233-9226 and follow us on Twitter and LinkedIn.  


This article is published by Equifax Canada Co.® 2022. All rights reserved. No part of this article may be reproduced, copied or transmitted in any form or by any means, or stored in a retrieval system of any nature, without the prior permission of Equifax Canada Co. This article is for informational purposes only and is not intended to be legal advice.