FICO\u2019s data show Canadians are paying down less of their credit card balances on average, and note that \u201caverage balances remain elevated.\u201d (Photo by Andrew Francis Wallace\/Toronto Star via Getty Images) \u00b7 Andrew Francis Wallace via Getty Images <\/p>\n
Signs of deteriorating credit health among the most financially vulnerable Canadians are a \u201cflashing signal,\u201d credit analytics firm FICO says.<\/p>\n
New credit card data for the first quarter of 2025 show an increasing reliance on credit cards and more Canadians having trouble paying their balances, FICO says, with issues most pronounced among younger and \u201cthin-file\u201d borrowers \u2014 people without much of a credit history.<\/p>\n
\u201cConsumers with fewer banking relationships \u2014 particularly younger individuals or those relying solely on credit products \u2014 are under increasing pressure,\u201d FICO\u2019s report says. \u201cThe surge in serious delinquencies among monoline borrowers\u201d \u2014 people with credit cards issued by firms that don\u2019t offer other banking services \u2014 \u201cis a flashing signal: financial fragility is deepening where there is the least cushion.\u201d<\/p>\n
Economists at financial institutions and the Bank of Canada (BoC) have been paying close attention to Canadians\u2019 spending<\/a> and credit health as ongoing trade tensions with the U.S.<\/a> roil the economy. In a speech in early June<\/a>, BoC deputy governor Sharon Kozicki noted that credit card data is one way the Bank can better understand Canadians\u2019 \u201creal-time spending patterns.\u201d<\/p>\n FICO\u2019s data show Canadians are paying down less of their credit card balances on average, and note that \u201caverage balances remain elevated\u201d and are rising again from COVID-era lows, when spending was generally restrained. On average, Canadians repaid just over 47 per cent of their balances in March, down from a pandemic peak of 60 per cent in September 2022. Balances have risen to $3,098 from $2,938 during the pandemic.<\/p>\n \u201cAlthough still below pre-pandemic highs, the recent upward trajectory signals renewed pressure on household finances, potentially from rising living costs or shifting spending habits,\u201d FICO\u2019s report said.<\/p>\n FICO notes that the rising balances aren\u2019t a consequence of higher spending \u2014 average monthly spending was down 4.2 per cent from the same period last year, to $1,549, which FICO says \u201creflects more cautious consumer behaviour or financial constraint as households rebalance their budgets.\u201d<\/p>\n Overall, rates of missed payments are \u201cbroadly stable,\u201d FICO says, but risks are concentrated in some borrower segments. Those missing a single payment was up eight per cent from last year, which FICO says \u201cpoints to the beginning of strain among a growing portion of the population.\u201d<\/p>\n Among monoline borrowers, who can have lower credit ratings, FICO notes a \u201ckey turning point\u201d in January, when the proportion missing two or more payments hit a five-year high. \u201cThis spike highlights sustained pressure on higher-risk segments \u2014 particularly those with limited financial history, fewer products with a financial institution, or recent entry into the credit market,\u201d FICO\u2019s report says.<\/p>\n","protected":false},"excerpt":{"rendered":"FICO\u2019s data show Canadians are paying down less of their credit card balances on average, and note that…\n","protected":false},"author":3,"featured_media":629,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[874,64,871,872,873,79,67,132,68],"class_list":{"0":"post-628","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-andrew-francis-wallace","9":"tag-business","10":"tag-credit-card","11":"tag-credit-card-data","12":"tag-credit-history","13":"tag-economy","14":"tag-united-states","15":"tag-unitedstates","16":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114718330348810213","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/628","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=628"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/628\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/629"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}