When it comes to getting credit for something, the residents of Barrie ON scored the top spot on a list of ten Canadian cities with the highest levels of household credit card debt. In fact, seven of the ten cities on the list are found in Ontario, with the outliers being St. John’s NL, Calgary and Kelowna. The list was compiled by Money.ca, an online financial resource, whose spokesperson, senior editor Romana King, says the study shows how rising costs of living have impacted Canadians, with some residents now reporting extremely high levels of credit card debt. “Most people will use short-term forms of credit, like credit cards, when trying to solve an immediate cash flow problem,” says King, adding Money.ca “analysed data from the Canada Mortgage and Housing Corporation to identify the metropolitan areas accumulating the most credit card debt.” Here’s the list #1: Barrie, ON: On average, each resident in Barrie owes $3,521.54 in outstanding credit card balances. #2: St. John’s, NL: Residents carry, on average, $3,451.95 in outstanding balances. #3: Toronto, ON: The GTA takes third with $3,428.63 in outstanding credit card debt per capita. #4: Peterborough, ON: Claims fourth with an average of $3,405.19 in outstanding credit card balances per capita. #5: The fifth highest amount of credit card debt in Canada is in Kelowna, BC, with the metropolitan area floating an average of $3,394 in credit card debt per capita. #6: Back to Ontario, this time to Brantford, sitting sixth overall with an average balance of $3,387.26 per capita. #7: Kingston ON takes seventh, with each resident in the metropolitan area burdened by an average of $3,344.16 in credit card debt. #8: Calgary, AB, with $3,273.16 of outstanding credit card debt per capita. #9: Thunder Bay, ON nudged into ninth with an average of $3,270.76 in outstanding balances per capita. #10: Hamilton, ON: Not the least in Canada but last on the top 10 list, with each resident having an average of $3,264.93 in outstanding credit card balances The list may be informative, but being on it could be putting stress on people, says King. “A credit card is a powerful tool. It can help create a person’s credit history and boost a credit score, tools that are integral to achieving important financial milestones, such as buying a car or a home,” she says. “However, there is a downside to credit. Digital transactions and the interest charged on borrowed money can add up, sometimes very quickly. People can get stuck in a cycle where they never pay down what they owe and barely pay the interest. This can lead to a cycle of debt.” She offers some tips to stop the cycle, suggesting people give more consideration to when and how they use credit cards. “There’s nothing wrong with using a credit card for an unexpected expense. The key is to have a plan on how you will pay back that borrowed money.” King suggests three strategies: 1. Use a low-interest credit card. The less you pay in interest, the more of your earnings can be used to pay off your debt. 2. Consider a consolidation loan. A consolidation loan, or an installment loan with a lower interest rate, groups all higher-interest debt into one lump sum and charges a lower interest rate overall. Again, the idea is to pay less in interest and use more of your money to pay your debt. 3. Go on a spending diet. This doesn’t mean don’t spend, since most people who turn to credit cards and fast loans are often using them to pay for essentials. Instead, consider a system that only allows you to spend what’s available. This can be cash envelopes or opening a no-fee bank account for each type of expense and only using the money in that account for those costs. Methodology The total outstanding credit card debt in each CMA (Census Metropolitan Area) was compared against the CMA's population, to reveal the average credit card debt per capita. These figures were then ranked from highest to lowest outstanding credit card balances per capita, revealing the areas with the highest credit card debt.
