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Getting a credit card is considered a pretty big milestone in many young Canadians lives, as it is typically is the first point of contact with any credit product and increasing purchasing power. There are countless credit cards that are easy to qualify for and when used correctly, it can help build your credit score. So, it’s no surprise that credit cards have been gaining in popularity. In fact, it seems more and more Canadians are switching to credit cards. Though cash is still a prominent method of payment, the number of credit cards in circulation from 2000 to 2018 has almost doubled from 40 to 76 million.  

Reasons Credit Card Usage Is Increasing

While cash and cheques have seen a decline in transaction volume, debit, credit, and electronic fund transfers (ETF) have seen a significant increase as seen in the table below. According to the 2018 Canadian Payment Methods and Trends report, Canadians are opting for faster and more convenient methods of payment such as electronic and contactless payments. Online bill payments, online shopping and app purchases, are also key drivers in the growth of credit card usage. 

Have you maxed out your credit cards? Click here

As technology continues to evolve, so will more convenient methods of payments, which inevitably will have consumers shifting toward it. Based on recent trends we can assume that the cash usage volume will continue to fall as more electronic methods of payment continue to grow. Moreover, loyalty programs have also incentivized Canadians to continue using their credit cards.

Payment methodVolume change since 2012
Cash and ABM-19%
Cheques and Paper-28%
Credit Card33%

Numbers are based on 2018 Canadian Payment Methods and Trends report

Evolving Payment Methods

As previously mentioned, the convenience brought by credit cards is one most people can’t turn away from. As technology improves on the different payment options available, the consumer’s payment preference will also evolve. The 2017 Methods of Payment report by Bank of Canada, suggests we are turning in a cashless society as Canadian preference for contactless payments via debit and credit has grown substantially. According to the 2018 Canadian Payment Methods and Trends, the digitalization of payments starting sometime in 2014, caused a rapid decline in cheques, ABM, and cash transaction volume. Looking at the years 2012 – 2017, where digitized payments and contactless payments emerged, we notice a decrease in traditional payment methods like cash and an increase in electronic methods like debit, credit and ETF.

  • 19% decrease in cash and ABM volume
  • 28% decrease in cheque and paper volume
  • Both debit and credit volume increase by 33%
  • ETFs has seen an increase in volume by 23%

With technology shifting consumer’s payment preferences away from conventional methods, major Canadian banks have reacted and have migrated more than 40% of their debit cards to contactless. This was a necessary move considering the steady growth of contactless payments over the last four years (2014 – 2017). Based on the 2018 Canadian Payment Methods and Trends report, the point of sale card volume for contactless payment rose from 623 to 2,997 million. 

Find out which banks accept contactless payments like Google Pay.

Credit Cards And Debt In Canada

Debt is a problem most Canadians face in their day to day lives. While some debt is good, too much can affect your credit score. In Canada, Transunion stated that credit card debt averages around $4179 dollars, which accounts for 5.3% of total outstanding debt. However, according to the CMHC, that number jumps to 14.6% when represented as a share of scheduled monthly payments.  Meaning “credit card debt represents a greater percentage of total scheduled monthly payments than of total outstanding debt” – CMHC

Learn when to use a credit card over a personal loan.

Credit Card And Credit Limits

Credit cards are considered a revolving credit product. It provides you with a line of credit that can be used up to its limit. The funds granted to you can be recycled as you pay down your balance. According to the Bank of Canada, 15% of Canadians have a credit limit of less than 2000 and 41% have a credit limit of 10,000 or more. 

That means the majority of Canadians have a credit limit of over 10,000 dollars making it easy to indulge and rack up debt. The problem with increased credit card debt is that in times of financial stress, it is the type of debt that Canadians will default on first due to something Transunion called the hierarchy of debt. However, on the bright side, according to the Canadian Bankers Association, most Canadians don’t use their credit cards as a means to borrow but rather as a method of payment. Meaning they do not rely on credit cards as a source of funding, but rather as a means to an end. 

Should you use a credit card for emergencies? Find out here.

Credit Card Rewards 

While credit cards provide a fast and convenient method of payment, the credit card rewards programs are one of the biggest reasons Canadians flock toward their credit cards for both big and small purchases. According to the Canadian Bankers Association, 72% of Canadians carrying at least one credit card that has a rewards program. Majority of Canadians use their cards so they can save up on their points to

In fact, according to the, 84% of Canadians choose their credit card based on the rewards they will receive, after which annual fee (37%) and interest rates (8%) come into play.

Are you addicted to your credit card? Find out here.

What Are Canadians Buying With Their Credit Cards?

According to the Bank of Canada, 89 percent of Canadians have at least one credit card, but what are Canadians using their credit cards for? According to, the main retail categories Canadians use their credit cards on are as follows: 

Bottom Line

In Canada, credit card advertisements are fairly prevalent, thus making it easy to gain access to multiple credit cards with very little effort. But, it is important to be aware that with increased credit card usage, the likelihood of racking up debt also increases. Unlike cash, credit card expenditures are hard to track making it easy to spend more than you should or can afford. It is also important to learn more about the choices available and to select a credit card that best suits your needs.

Priyanka Correia, BComm avatar on Loans Canada
Priyanka Correia, BComm

Priyanka Correia is a Marketing Coordinator and personal finance expert at Loans Canada. Priyanka completed her Bachelor's degree in Marketing at Concordia University and has published work that has been mentioned in various news media. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives.

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