Canadians with the lowest credit scores paid down their credit cards the most since the pandemic started. Incredible, right? So, will this downward trend in debt continue? Or is this temporary because most of us are still at home and collections activity is slim? Today we review the latest debt statistics and discuss why Canadians are paying off so much debt, who’s actually taking on more debt, and whether borrowing will rise again in the near future. We also share practical advice for managing debt and what to do if you owe the CRA. Tune in for a lively discussion!

Links:

Hoyes Michalos Straight Talk on Personal Finance Course on Credit Rebuilding: courses.hoyes.com

Trends in household non-mortgage loans: The evolution of Canadian household debt before and during COVID-19, Statistics Canada: 621-m2021004-eng.htm"> https://www150.statcan.gc.ca/n1/pub/11-621-m/11-621-m2021004-eng.htm

Bank of Canada, Financial System Review – 2021 https://www.bankofcanada.ca/2021/05/financial-system-review-2021/ 

Canadians with Lowest Credit Scores Led Wave of Pandemic Credit Card Debt Repayment: https://www.reddeeradvocate.com/business/canadians-with-lowest-credit-scores-led-wave-of-pandemic-credit-card-debt-repayment/

Hoyes Michalos Bankruptcy Study www.joedebtor.ca

Time Stamps:

0:50 Bank of Canada says Canadians increased “prudence”

2:00 Household non-mortgage debt collapses

3:00 Spending dropped during the pandemic

6:00 Credit card debt collapses

9:15 HELOCS – Massive increase in Home Equity Lines of Credit

12:20 Outstanding credit card balance by credit score

13:00 Who paid down credit cards the most?  Not who you would expect

13:40 How were people with low credit scores able to pay down their credit cards the most during the pandemic?

18:50 What will happen in the future?

24:30 Dubious speculation on when CRA will start aggressively collecting tax debt

28:30 Where the economy is now

28:50 Practical Advice