A whopping 60.1% of Canadians are not comfortable with their current level of debt, according to an independent survey from RateSupermarket.ca, Canada’s largest impartial rate comparison service. Among the 2,929 respondents from across the country, the leading cause of debt concern by far (38.8%) is credit card debt.
“We found that one of the largest contributors to credit card debt seems to be impulse purchases of small items or food and entertainment, which, left to accumulate interest, can ultimately lead to a huge mountain of debt,” said Kelvin Mangaroo, President of RateSupermarket.ca.
One third of respondents admitted to going into debt over something that they later regretted; while many cited cars or bad investments as their largest “debt regret,” the common theme that emerged was that many have found themselves in financial straits not due to large lavish purchases, but rather through frequent, mindless spending on ‘wants’ like clothing, restaurants, gifts, and holidays.
“We’re not seeing people overspending on luxury or big-ticket items,” said Mangaroo. “Rather, it’s a slow and steady pattern of small purchases combined with smaller credit card payments that are putting a huge number of Canadians into debt.”
Many of those same people are also in denial: The majority (53%) believe that they have less debt than the average Canadian (30.7% believe their debt is average, while only 16.3% believe their debt is higher than average.) When specifically asked about credit card debt, the number of those believing their debt was below average jumped to 60.8%. Only 13% believe their credit card debt is above the national average.
But the dollar amounts would seem to contradict this belief. When asked about current credit debt levels, over a quarter of participants (25.5%) indicated they owed over $5,000 to credit cards. Close to 10% indicated owing over $14,000.