How much credit card debt does the average Canadian have?

How much debt does the average Canadian carry? 

The average credit card balance for Canadians in the third quarter of 2024 was $4,562, according to TransUnion. This is up 6.97% from the previous year, putting credit card debt as the fastest-growing type of consumer debt over car loans, lines of credit and mortgages. Another source, Wealthsimple, reports a similar amount but a bit higher than TransUnion, at $4,787.

Driven partly by millennial and Gen Z populations, the number of Canadians with credit ballooned, as did the total outstanding new debt—a record $2.5 trillion at the end of 2024. Even more ominously, more than 1.3 million Canadians missed a credit payment in the third quarter the year, according to another report, a number up more than 10% from the previous year. (If you get a work bonus, find out if you should use it to pay off credit card debt or put it toward something else.)

Why is credit card debt so high in Canada?

The last few years have been marked by a rising cost of living, interest rate fluctuations and general economic insecurity—factors that have put many in the position of taking on debt. 

Now, however, the economy has begun to correct. The rate of inflation in January 2025 was 1.9%, down significantly from its peak of 8.1% in mid-2022 and well within the Bank of Canada’s target of between 1% to 3%. Accordingly, the BoC has dropped its policy rate to 3%, bringing the cost of borrowing—on loans, credit cards and mortgages—back into normal ranges. 

What, then, is contributing to Canadians’ debt loads?

Anne Arbour is the director of partnerships and education at the Credit Counselling Society, an accredited non-profit charity that helps Canadians solve their money problems. She identifies three key factors.

“While mortgage rates have come down from their peak [in 2023], many consumers are renewing at rates higher than they were previously managing,” Arbour explains, adding that the differences could be significant—as much as 50% more. 

Inflation may have levelled off, but it doesn’t mean the cost of living in Canada has decreased. “This is impacting the ability of many consumers to reduce their reliance on credit or to pay off their balances in full.” For many, Arbour notes, credit cards are a means to make ends meet month to month.

The last major factor to account for comes from the United States. “the news around tariffs is causing uncertainty.” 

How long should it take to pay off credit card debt?

The answer depends largely on your own personal circumstances. Ask yourself: How much can I afford to pay off monthly?

“What’s important for anyone to know,” says Arbour, “is their monthly capacity to make payments.” 

Being proactive and disciplined about meeting at least the minimum payments—and more, whenever possible—is essential to settling your debt. Overestimating what you can afford to pay, however, can create an untenable financial situation that might require you to take on even more debt. Arbour recommends using a calculator, like this interactive budgeting tool to help yourself find the sweet spot. (Check out MoneySense’s free Excel budget template for Canadians.)

“What dream or goal do you have for your future self or loved ones that you could be saving for now, rather than using your hard-earned dollars to repay that debt for months or years to come?”

Why it’s important to tackle your debt now

Carrying debt can be a huge strain on your financial health and also your emotional well-being.  

First, let’s look at the financial situation. When you have unpaid debt, the dollar amounts on the credit card bills only represent a portion of the cost of repayment. You’ll also need to account for the interest accumulated while you pay them off. The longer you take, the more interest will accrue. 

An unbalanced credit utilization ratio (the amount of debt you carry compared to the amount of credit you have) or missed payments will have a negative impact on your credit score, which could, in turn, affect your ability to take out a loan, get a mortgage or even get a job.

“What I’d also like people to take into consideration is the opportunity cost of letting a debt sit for any period of time,” notes Arbour. “What are you giving up on by not repaying that debt as quickly as possible, or even letting it get larger? What dream or goal do you have for your future self or loved ones that you could be saving for now, rather than using your hard-earned dollars to repay that debt for months or years to come?” 

There’s evidence that carrying debt can weigh on our emotional well-being, too. According to the latest Consumer Debt Report from the Consumer Credit Counselling Society, the majority of Canadians feel concerned or worried (84%) about their debt—that number was 54% in last year’s survey.

Debt, particularly when held for a prolonged amount of time, can cause enormous amounts of stress. Arbour points to sleep problems and health complications as the physical effects. These can lead to lower productivity and higher absenteeism, negatively impacting your professional life. Emotionally speaking, debt can affect your moods and your relationships with others.

Proven strategies to bring down credit card debt

Once you’ve decided to tackle your debt, you’ll want to build a strategy. “The best, first step is to take a deep breath and to face the issue,” Arbour advises. “Debt can feel very isolating, but you are not alone and there is help available.”

1. Make a budget

You simply can’t plan to pay back debt effectively unless you understand what you’re working with. “Knowing your numbers—how much you owe today, at what interest rate and to whom—is a great place to start, as well as knowing your resources—how much money you have to direct to the debt each week or month,” says Arbour. She also recommends reaching out to a neutral, confidential, professional source, like her organization, which provides accredited counsellors to assist. 

Be wary, however, of advice or schemes that sound too good to be true. “It took some time to get into debt, so it could take some time to get out of it,” Arbour warns. Be skeptical of companies promising quick fixes. 

2. Negotiate interest rates or the terms of your debt

One lesser-known strategy is to approach your creditors and ask to renegotiate rates or terms. This could involve asking for a lower interest rate—or even asking for the ability to pay on an accelerated schedule, should that be within your means. 

“It’s important to know the terms and conditions of your particular debts,” says Arbour. “Ideally, you don’t want to incur any penalties or charges that would negate any benefits you’d get by paying things off early.” 

3. Switch credit cards

If you’re carrying debt on a regular credit card, you’re likely paying 20.99% in interest. By switching to a lower-interest card, you can relieve your debt load substantially. Some cards offer a low-interest or no-interest promotion for a limited time when you do a balance transfer. Find the right offer to buy yourself some time.   

4. Consolidate your debt

If you’ve got several types of debt such as personal lines of credit, credit cards and loans, it might be helpful to look at debt consolidation as part of your repayment strategy. Debt consolidation is the process of taking multiple debts (each with its own terms and rates) and combining them into one debt—with a single monthly payment and a lower interest rate. 

If you’re among the millions of Canadians carrying debt, you’re not alone. Luckily, there are resources and strategies you can use to improve your financial and emotional well-being, and shrink your balance.

Read more about building credit in Canada:

• Best low-interest credit cards in Canada
• How to build a credit history while renting in Canada
• Want to raise your credit score in Canada? Avoid these mistakes
• Couples and credit scores: How your partner’s credit can affect yours

About Keph Senett

Keph Senett writes about personal finance through a community-building lens. She seeks to make clear and actionable knowledge available to everyone.