Canadians paid down their non-mortgage debts at the fastest pace in 30 years during the pandemic, according to Statistics Canada.
Credit card debt declined by 18% in the year from February 2020 until the end of January this year (2021). That's significant because credit card balances have been growing steadily almost without exception since 2000, going up on average by more than 20% each year.
In 2000, Canadians owed a total of $13.2 billion on their credit cards. By February 2020, that figure had ballooned to $90.6 billion. But, as of January this year, it was down to $74 billion, a decline of more than $16 billion. That's the biggest drop in credit card balances since 1999.
People with the worst credit scores were the most likely to pay down some of their high-interest debt. People with credit scores of less than 640 have managed to reduce their credit card balance by more than a third.
Canadians on the high end, with scores above 800, now have a credit card balance about one seventh less than it used to be.
While the decline in all forms of debt that aren't mortgages is encouraging, overall, Canadians still owe more than they did before the pandemic largely because of demand for mortgages.
Mortgage debt increased by $18 billion in April this year, Statistics Canada reported earlier this summer, the biggest monthly increase ever. All in all, Canadians owe more than $2 trillion on their homes. That's more than the value of Canada's entire gross domestic product (GDP).
