A new survey reveals about one in five Canadians plan to take on more debt this year as they struggle to pay their bills.
On Tuesday, TransUnion Canada released its Consumer Pulse study, which found 82 per cent of those asked worry about inflation and 44 per cent expect their finances to be worse in the year ahead. The study surveyed 1,000 Canadian adults between Sept. 25 and Oct. 6, 2024.
The survey also found one in five Canadians plan to take on more debt in 2025, with 43 per cent saying they plan to apply for a new credit card.
“There is a segment of Canadians that are using credit to substitute for cash flow,” Matt Fabian, of TransUnion Canada, said in the report.
The survey also found 57 per cent of respondents are concerned about housing prices while 15 per cent are considering refinancing their property.
Credit counselling services said many Canadians are taking on more debt as they struggle with the high cost of living.
“It is really concerning to us to see the number of Canadians who feel forced to apply for new credit cards or get increases on their lines of credit,” said Bruce Sellery, CEO with Credit Canada.
TransUnion’s survey also found one in four people said they might not be able to pay all their bills in 2025.
Additionally, more consumers don’t expect their income to increase so they plan to take on more debt in the year ahead.
Credit Canada saw one of its largest increases in clients seeking help last month in more than a decade.
“In the month of December, we saw a 65 per cent increase in the number of people who were coming in doing a debt consolidation program,” Sellery said.
TransUnion’s survey found consumers are doing what they can to save money with 71 per cent indicating they’re trying to reduce spending, 36 per cent are trying to build up savings and 33 per cent are hoping to pay down debt.
The survey notes political uncertainly could also affect finances for many in the year ahead, as U.S. President-elect Donald Trump promises to impose 25 per cent tariff on Canadian imports.
“What’s going to have to see what will happen with the tariff situation and how that will impact Canadians and different regions in Canada,” said Fabian.