top of page
  • Frank Tian

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


Reasons


👉 Restricted activities caused by the virus


👉 Higher savings from stimulus measures


👉 Alternative payment tools



Results


🔻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.



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:



Recent Posts

See All

Auto Loan Update

🚗 How is the auto loan doing in 2023 so far? Everything is up. 🟦 Auto Price Up The new car price index continues to climb in May, +4.7% Y/Y. It has grown 21% since Feb 2020. Many models become luxu

Old Bank/Card Model Still On Fire

The Economist recently published a piece to highlight the resilience of credit cards in developed economies. In the US, the credit card balance dropped as much as 16% during the pandemic*, but has mad

Comments


bottom of page