Canadian Consumer Debt Hits $2.4 Trillion in Q3 2023: Credit Card Balances Reach All-Time High

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Smart Strategies for Families: Navigating Grocery Shopping in a Shrinkflation Economy In today's economy, families are feeling the pinch as prices continue to rise and the phenomenon of shrinkflation becomes more prevalent. Shrinkflation, the sneaky tactic used by manufacturers to reduce product sizes while maintaining the same price, means consumers are paying more for less. In such challenging times, it's crucial for families to adopt savvy shopping habits to make every dollar count. Here are some practical tips to help your family save money while grocery shopping: **1. ** Strategic Planning with Coupons: Coupons are your secret weapon against rising prices. Keep an eye out for coupons in newspapers, online, or through store apps. Many grocery stores also have loyalty programs that offer exclusive discounts to members. By combining coupons with store promotions, you can maximize your savings significantly. **2. ** Create a Shopping List: Planning is key. Before heading to the store, make a list of essential items your family needs. Organize the list based on categories such as fruits, vegetables, dairy, and household essentials. Stick to your list to avoid impulse purchases, which can quickly add up. Planning your meals for the week can also help you buy only what you need. **3. ** Take Advantage of Sales: Pay attention to weekly sales and discounts offered by your local grocery stores. Base your meal plans around these sales to make the most of your budget. Buying items in bulk during sales can save you money in the long run, especially for non-perishable goods like canned goods, pasta, and toiletries. **4. ** Buy Generic Brands: Name brands often come with a higher price tag. Generic or store brands usually offer similar quality at a lower cost. Give them a try, and you might be pleasantly surprised at the savings without compromising on the quality of your groceries. **5. ** Embrace Fresh and Seasonal Produce: Opt for fresh, seasonal produce as they are not only healthier but also more affordable. Local farmers' markets often offer fresh produce at lower prices than supermarkets. Buy in bulk, freeze, or can seasonal fruits and vegetables to enjoy them throughout the year without paying a premium. **6. ** Minimize Food Waste: Be mindful of expiration dates and plan your meals to use up perishable items before they go bad. Store leftovers properly, and consider meal prepping to avoid waste. You can also get creative with recipes that use leftover ingredients, reducing your overall grocery expenses. **7. ** Comparison Shopping: Don't settle for the first price you see. Compare prices between different stores, and consider shopping at discount or warehouse clubs for bulk items. Just be sure to calculate the unit price to ensure you're getting the best deal. **8. ** Utilize Cashback and Rewards Programs: Several apps and credit cards offer cashback and rewards for grocery purchases. Take advantage of these programs to earn back a portion of your expenses, which can add up over time. **9. ** DIY Whenever Possible: Instead of buying pre-packaged or processed foods, consider making them at home. Items like snacks, sauces, and even bread can be prepared at home for a fraction of the cost of store-bought alternatives. **10. ** Stay Informed: Stay updated on market trends, price fluctuations, and new discounts by following grocery store newsletters, social media accounts, or apps. Being aware of the best deals and discounts can help you plan your shopping trips more effectively. In conclusion, navigating the grocery store in a shrinkflation economy requires diligence and strategic planning. By embracing these tips, your family can save money without sacrificing the quality of your meals. With a little effort and smart decision-making, you can make your grocery budget stretch further and adapt to the changing economic landscape.
Planning your grocery shopping can help save money and make ends meet.

Staggering Increase in Consumer Debt

As of Q3 2023, Canada’s total consumer debt has reached an unprecedented $2.4 trillion, marking an $80.9 billion increase from the previous year. This surge occurs despite the current economic climate of high interest rates and a slowing economy, as reported by Equifax® Canada’s latest Market Pulse Consumer Credit Trends and Insights.

Credit Card Debt Skyrockets to Record Levels

A significant driver of this debt increase is the spike in credit card usage. Credit card balances have peaked at $113.4 billion, the highest ever recorded, representing a 16% jump from last year. Remarkably, over 6 million new cards were issued in the past year, a 13.7% increase from 2022.

Factors Driving the Surge in Credit Card Debt

Rebecca Oakes, Vice-President of Advanced Analytics at Equifax Canada, attributes this rise in credit card debt to multiple factors, including the rising cost of living, higher interest rates, and economic slowdown. These elements are exerting substantial pressure on household budgets, making it challenging for many Canadians to manage their finances effectively.

Alarming Rise in Delinquencies Across Canada

The report also sheds light on an increasing trend of missed payments on credit products nationwide. The rate of Canadians missing at least one payment has escalated from 1 in 31 during the pandemic to 1 in 25 in Q3 2023. This trend is particularly pronounced in Ontario and British Columbia, with an alarming rise in severe delinquencies.

Housing Market Strains Amid Economic Slowdown

The Canadian housing market is also feeling the pinch, with a 9.5% drop in new mortgage originations compared to last year. Despite these challenges, the average loan amount on new mortgages increased to $343K. This indicates that affordability issues and high interest rates are significant deterrents for Canadians considering new mortgages.

Analysis of Debt and Delinquency Rates by Age and Region

Equifax’s data provides a detailed breakdown of debt and delinquency rates across various age groups and major Canadian cities. Notably, older age groups tend to have higher average debts, while delinquency rates are rising across the board. Major cities like Toronto and Vancouver are experiencing notable shifts in both debt levels and delinquency rates.

This report from Equifax Canada paints a concerning picture of the financial health of Canadian consumers in 2023. With rising debt levels and an increasing number of delinquencies, it’s clear that economic pressures are having a tangible impact on households across the country.

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