By 2023, consumers could be ‘buried’ in debt by juggling household budgets, juggling financial obligations and now spending vacations.
New Westminster, BC, December 8, 2022 /CNW/ – For many, this past year has been a tough financial year. With soaring costs of goods and services, rising interest rates and fears of a recession, 2022 has never been “fun” for Canadian budgets. And anxiety about vacation spending comes to the fore.
A 2022 Holiday Spending survey conducted by CPA Canada found that two in three Canadians (67%) believe inflation will make it harder to buy gifts this holiday season. rice field.However, the same survey found that they still expect to spend $589 Gifts – Average CPA similar to what Canada has found in previous years from annual surveys.
“It can be difficult to cut back on spending while on vacation,” explains Scott Hannah, President and CEO of the Credit Counseling Society. For many of us, this is usually a time of sharing and fun, but if there ever was a year when spending and borrowing slowed down, it would be it.”
Instead of slowing down, credit card usage continues to grow.The latest Equifax Canada Market Pulse Quarterly Credit Trends Report finds that consumer debt $2.36 trillionthe non-mortgage debt per consumer is $21,183is the highest level since the second quarter of 2020. Similarly, according to a recent TransUnion report, participation in credit has reached a record high, with approximately 28 million Canadians using active credit products. This is an increase of about 8% from last year. Mark KalinowskiA financial educator at the Credit Counseling Society says this shows the times we live in. “Last year we advised our clients to find ways to tighten their budgets, but now many need a credit card just for basic purchases.”
Unfortunately, we see little relief. According to the latest data, 2023 is predicted to be another year of financial distress and rising costs. Canada’s food price report. This can make paying bills while on vacation more difficult than ever. One way he’s prepared is to be in the best possible financial position to meet these challenges, Kalinowski adds. “Avoid the January debt trap and get some peace of mind this year. Vacations only last a few weeks. Don’t chase their expenses through 2023.”
The consequences of this “holiday hangover debt” can be far more damaging than we think. “Additional vacation costs could push many households to a tipping point next year, especially if they rely on credit to cover expenses.” 3 in 10, according to a recent Equifax Canada report. 37% said they had most of their credit card debt during the holiday season, and 41% needed it. It takes over a month to pay for those purchases.
“When it comes to that ‘special occasion’ spending, especially around the holidays, many of us tend to take a break from worrying about debt,” Kalinowski explains. It’s all too easy to get distracted from your financial troubles with so much going on in the world.” This season, we encourage anyone struggling financially to seek help as soon as possible. “There’s no rule that you have to wait until the new year to start working. If you need help, get in touch sooner or later. It will help you enjoy your vacation more.”
About Credit Consulting Society (CCS)
The Credit Counseling Society is a non-profit organization dedicated to helping consumers better manage their money and debt. CCS provides free and confidential credit counseling, debt service options, budgeting assistance, and financial education. Visit www.nomoredebts.org
SOURCE Credit Counseling Association
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