š³ The Canadian credit card balance is still down significantly.
š¢ The speed of recovery is slower than consumer spending.
Source: Globe and Mail
Reasons
š Restricted activities caused by the virus
š Higher savings from stimulus measures
š Alternative payment tools
Results
š»Lower balance = lower interest income
šŗMore transactors + more card-not-present transactions = higher fees
The latter cannot fully offset the former,
šø So the overall profitability is still down.
Actions
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.
Further reading:
Globe and Mail, James Bradshaw, "Big banks credit-card profits slow to recover as Canadians carry lower balances".
Ī£ĻĻĪ»Ī¹Ī±