Experts warn of credit card defaults if a recession happens
BNN Bloomberg
Canadians who have turned to their credit cards in order to keep up with the rising cost of living are at risk of pushing themselves further into financial hardship in the event of a recession, experts say.
Heading into the 2008-2009 financial crisis, Canadians owed $1.52 for every dollar of disposable income, which has since risen to $1.82 as of 2022, according to data released by Statistics Canada.
The rise in debt levels that Canadians are obligated to pay off has some experts cautioning of a possible increase in credit card defaults, especially during a period of heightened economic uncertainty.
“The consumer debt picture feels different this time compared to the 2008-2009 crisis,” Yanchuk Oleksy, the chief executive officer of Credit Counselling Canada, said in a phone interview on Wednesday.
