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Survey: Canadians Are Turning to Credit Cards for Financial Relief This Holiday Season

Survey: Canadians Are Turning to Credit Cards for Financial Relief This Holiday Season

Over 50% of Canadians responded that inflation will make them spend less this holiday season; many will turn to credit cards and BNPL loans to cope with the limitations of cash

Hardbacon, a personal finance application used by more than 40,000 Canadians, released a new survey revealing that over 50% of people are turning to credit cards for their holiday spending.

According to the survey, inflation is the biggest factor limiting holiday spending and leading consumers to turn to credit cards to help them cope with the limitations of cash. In fact, the latest data from Statistics Canada shows that Canadians owe almost $1.82 for every dollar of disposable income.

The results show that 54.46% of Canadians responded that inflation will make them spend less this holiday season, while nearly one-third (32.49%) of respondents said that inflation would have no effect on their spending. The last 13.04% said that they would spend more.

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Regardless, cash is on the naughty list this year and credit cards are king. One third of respondents (33.67%) said they will use a cash back credit card, while another 30.67% would pay with a rewards credit card. Only 12.67% said that they would use a low-interest credit card.

Respondents are also interested in modern, alternative payment methods. A full 4.12% of Canadians will use a Buy Now, Pay Later (BNPL) program for their holiday shopping, which is a relatively new way to pay for purchases in equal payments via an installment plan.

Canadians estimate spending an average of $767 on the holidays, including gifts, entertainment, and transportation. However, 34.55% of respondents know that they are spending a lot more than if they didn’t have a credit card. Likewise, 61.11% of those who will use BNPL programs for their holiday spending estimate that they would spend less during the holidays if they did not have access to this type of credit.

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Of those who answered that they plan to use a credit card, they estimate an average credit card debt of $1,257.84 in January 2023, and it won’t be that simple to pay off. There’s 31.53% of respondents who already know that they won’t be able to pay off their credit card in full between November 2022 and January 2023.

“The holidays are looking a little different this year and inflation definitely has some Canadian consumers thinking twice about how they will spend their money,” said Hardbacon Editor-in-Chief, Stefani Balinsky. “As Canadians put the focus on holiday spending, they are taking advantage of the benefits credit cards can deliver.”

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[To share your insights with us, please write to sghosh@martechseries.com]

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