As Canadians focus on” surviving,” they are more likely to have credit card debt than one in five. 

More than one in five Canadians expect to take on more debt in 2025, mostly via credit cards, according to a TransUnion consumer report that experts say shows many focus on” surviving”.Trans Union’s fourth quarter Consumer Pulse study, released on Tuesday, surveyed 1, 000 adults between Sept. 25 and Oct. 6 about their expectations for 2025. According to that research, 22 % of Canadians intend to recoup their loan by applying for or refinancing existing funds by 2025. Credit cards are the most popular type of credit product, according to Trans Union, with 43 % of that one in five people putting in applications. Increased payment on a recent card is the next step in the development of loans. Even as the Bank of Canada continues to reduce its important interest rate and inflation continues to decline, there is a chance of taking on more debt. However, Matthew Fabian, TransUnion Canada’s director of financial service analysis and discussing, claimed that despite both falling, there is a “lag result” for Canadians to see the benefit from the financial strains they experienced in the past. According to Fabian,” Cost of living increased at the same time the cost of loan increased, especially if you had something like a loan, and interest rates increased, all of a sudden it cost you more to have that debt, and that combination truly stressed a lot of consumers ‘ wallets and created what we call this payment shock.” More than half of households reported that their finances were worse than they had planned for 2024, despite the fact that they had previously earned the same amount of money and had no expectation that it would shift in the coming year. Additionally, according to the study, 26 % of Canadians anticipate paying at least one of their current bills or loans in full. 1: 58
Young Canadians struggling most to give expenses: EquifaxWhile Canadians of all years were feeling a push, Teenagers were the highest proportion of users with 35 per cent saying they wouldn’t be able to pay a bill in full. This generation, according to the investigation, has for the first time outgrown baby boomers and holds 27 % of credit transactions. Consumers claim that paying all of their debts, bills, loans, or obligations is “possible problem” for them to make ends meet. One in four respondents to an Ipsos poll conducted primarily for Global News in December rated inflation and the cost of living as their major concerns in Canada nowadays, with fresh Canadians particularly suffering as a result of their struggles to find employment or be unable to enter the housing market. According to that survey, Canadians ranked among the top five worldwide for affordability concerns for the second year in a row, with affordability anxiety particularly high in Canada in comparison to peer nations. ” It comes down to circumstances. Many people mistakenly believe that getting a new credit card is just surviving for another day, according to Barry Choi, a Money We Have personal finance expert. They gain access to that credit card, pay off the old ones, and then, of course, they have to pay off the new ones. So it is a little bit of a catch-22″.4: 44
Poll: Canadians continue to struggle with debt: Choi and Fabian note caution caution caution against accepting credit card debt. If you only pay off a small portion of your balances at once, interest will build up and you could have to pay more in total. However, Fabian added it’s still better to pay a small amount that you can afford than miss a payment altogether. While inflation and interest rates are likely to stabilize in 2025, the study found that the majority of Canadians intend to change their financial habits in the coming year, with some wanting to do so in order to prepare for a potential recession. About 71 % of households said they planned to cut spending, with discretionary expenses like dining out and traveling being the most significant way to alter the budget. Another 36 % of people said they were working to increase their savings, and 33 % said they were working to reduce debt. ” Canadians are taking proactive steps”, Fabian said. ” They’re thinking about it in the context of,’ Well, if this]economic uncertainty ] is going to happen again, I have to be better prepared. ‘” —with files from Global News ‘ Craig Lord&amp, copy 2025 Global News, a division of Corus Entertainment Inc.