Credit Card Debt is Growing Among Canadian Renters

A report by the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) noted that renters are more likely to carry non-mortgage debt

In recent years, credit card debt has become a growing concern among Canadian renters. Rising housing costs, stagnant wage growth, and inflationary pressures have left many struggling to make ends meet. As rental rates continue to soar in cities like Toronto and Vancouver, renters increasingly rely on credit cards to cover basic expenses like groceries, transportation, and utilities.

The COVID-19 pandemic further exacerbated this issue. During the economic downturn, many Canadians faced job losses or reduced hours, forcing them to turn to credit as a temporary solution. While government support programs provided some relief, the lingering effects of the pandemic have left many renters with mounting debt.

A report by the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) noted that renters are more likely to carry non-mortgage debt, including credit card balances, than homeowners. Renters, who don’t benefit from home equity as a financial buffer, are often more vulnerable to rising interest rates and financial instability.

As credit card interest rates climb alongside inflation, the cycle of debt becomes harder to break. Experts are urging renters to seek financial advice and explore alternatives such as budgeting, consolidating debts, or negotiating with landlords for more affordable housing options.

With the current economic conditions, addressing this growing credit card debt problem is essential to prevent long-term financial hardship for Canadian renters.