Q4 '21: Canadian Card Down Significantly
Updated: Dec 21, 2022
💳 The Canadian credit card balance is still down significantly.
🐢 The speed of recovery is slower than consumer spending.
Source: Globe and Mail
👉 Restricted activities caused by the virus
👉 Higher savings from stimulus measures
👉 Alternative payment tools
🔻Lower balance = lower interest income
🔺More transactors + more card-not-present transactions = higher fees
The latter cannot fully offset the former,
💸 So the overall profitability is still down.
Card issuers roll out new products to target segments with high spending growth (travel, grocery).
Consumers should take advantage of low rate/high reward offers - enjoy a break from growing high-interest debt.
Globe and Mail, James Bradshaw, "Big banks credit-card profits slow to recover as Canadians carry lower balances".