Which Canadian cities have the highest credit card debts and how do experts suggest managing them?
A study focusing on credit card usage in Canada has identified Barrie, Ontario, as the city where residents hold the highest average credit card debt.
Each inhabitant of Barrie owes an average of $3,521.54, positioning the city at the top of the national debt list.
Following closely, St. John’s, Newfoundland, and Labrador, claims the second spot with an average debt of $3,451.95 per resident.
The study, which draws data from the Canada Mortgage and Housing Corporation (CMHC), also points to areas with less significant debt levels. Notably, Trois-Rivières, Quebec, registers the lowest credit card debt figures in the country.
Romana King, a senior editor at Money.ca, explains that credit cards often serve as a short-term solution for immediate financial difficulties. Money.ca, an online platform providing financial advice and resources, undertook this analysis to track high-cost lending trends across various Canadian cities.
|
Rank |
Census Metropolitan Area |
Outstanding Credit Card Balance per capita |
|
1 |
Barrie, Ontario |
$3,521.54 |
|
2 |
St. John's, Newfoundland, and Labrador |
$3,451.95 |
|
3 |
Toronto, Ontario |
$3,428.63 |
|
4 |
Peterborough, Ontario |
$3,405.19 |
|
5 |
Kelowna, British Columbia |
$3,394.11 |
|
6 |
Brantford, Ontario |
$3,387.26 |
|
7 |
Kingston, Ontario |
$3,344.16 |
|
8 |
Calgary, Alberta |
$3,273.16 |
|
9 |
Thunder Bay, Ontario |
$3,270.76 |
|
10 |
Hamilton, Ontario |
$3,264.93 |
The findings also reveal that Toronto, Ontario, and Peterborough, Ontario, are not far behind, with average debts of $3,428.63 and $3,405.19, respectively. Kelowna, British Columbia, rounds out the top five with an average debt per capita of $3,394.11.
Other cities featured in the top ten for highest credit card debt include Brantford, Ontario; Kingston, Ontario; Calgary, Alberta; Thunder Bay, Ontario; and Hamilton, Ontario. These cities exhibit slightly lower, yet substantial, average debts ranging from $3,387.26 to $3,264.93 per capita.
King offers insights into the dual nature of credit card use: “A credit card is a powerful tool that can help build credit history and improve credit scores, essential for significant financial activities like purchasing a car or a home.”
However, she also warns of the potential pitfalls, such as the accumulation of interest and the risk of entering a perpetual debt cycle.
To counteract these risks, King suggests practical strategies for managing credit use.
She recommends opting for low-interest credit cards, considering consolidation loans to combine high-interest debts into a single loan with lower rates, and adopting a spending diet to control expenditures, ensuring that spending does not exceed available funds.
