A new report has found that Canadians are increasingly relying on credit to make ends meet as inflation impacts household finances across the country.
A survey by credit reporting agency TransUnion (TRU) has found a sharp increase in debt levels among Canadians in this year’s second quarter.
The report says that total household debt reached $2.3 trillion in Q2, up 4.2% compared with last year.
TransUnion found that the number of consumers adding to their credit balances rose across the board between April and June of this year.
In all, demand for new credit grew 17% in Q2 compared with last year, TransUnion said.
The report also found that the riskiest segment of Canadian borrowers, the “subprime” level, saw their credit balances rise by 9% year-over-year during Q2.
TransUnion says the higher debt levels among consumers can be attributed to the rising cost of living due to inflation, as well as higher interest rates on variable-rate loans that are straining household budgets.
