Over a quarter of Canadians will go over budget with holiday spending, and 8 per cent will keep the debt for up to one year
For many Canadians, managing household finances during the holiday season can be a source of stress. Today, LowestRates.ca, an online recommendation site for personal finance products like insurance, mortgages, loans and credit cards, released a report that examined credit card usage of 1,378 users of its website during the holiday season. The report found that 63 per cent of Canadians use a credit card to do their holiday shopping and 39 per cent will have debt at the end of the season.
When it comes to budgeting, over a quarter of Canadians (26 per cent) go over their holiday spending limit, with an additional 40 per cent occasionally exceeding their budget. One in five Canadians (20 per cent) will hang on to that debt for one to two months following the holiday season; 12 per cent will have the debt for two to four months; and 8 per cent of Canadians will maintain their holiday credit card debt for up to one year.
“It’s clear that the majority of Canadians are opting to use credit cards to do their shopping, and it’s important that they’re using cards that are best suited to their needs and spending habits,” said Justin Thouin, CEO of LowestRates.ca. “Like most personal finance products, there are tons of options when it comes to credit cards, and so Canadians should be exploring those, particularly in the lead up to holiday spending. For instance, cards with lower interest rates or larger cash-back plans can make a huge difference for seasonal spending.”
Fifty-one per cent of Canadians named perks and rewards as the most important consideration when choosing a credit card, with 42 per cent placing importance on interest rates.