When in doubt, Canadians turn to credit cards during the holidays
Things in Canada aren’t so great right now.
Oh, they’re pretty good for Canada. Our national economy is growing faster than analysts could predict, and production capacity is beginning to finally approach pre-recession levels.
Yet on the ground, where the economy’s performance is really felt, consumers have puckered up tight. We discussed Canada’s plummeting consumer confidence in this space just yesterday.
But as a new report details, we can throw all that aside during the holidays. Thanks to credit cards, today’s debt concerns will be January’s problem.
According to yesterday’s story on consumer confidence, the Bank of Canada reported Canucks were nervous about the economy’s future, not at all ready to face making major purchases – a key indicator of the shopper’s mindset – in the coming months.
*Bing: How much should you spend on gifts each year?
Though we’re seeing at least a suspension of that conservative approach as Christmas nears.
Retail spending in Canada continues to be strong, having climbed for three months in a row, most notably on Black Friday and Cyber Monday, when Canadian shoppers saw no problem in emptying their wallets despite the bargain-happy days having been designed for the American consumer.
And by the guess of two parties, more recent holiday spending is up, too. Payment processor Moneris Solutions said Canadian holiday spending is up 4.6 per cent from 2010; the Retail Council of Canada, by contrast, estimates it’s up three per cent from a year earlier. Split the difference and we’re talking near four per cent growth, no matter how you slice it.
How are we spending? Presumably, with credit cards. Numbers for December aren’t yet available, of course, but the latest credit card figures show a whopping increase from 2010. According to the Bank of Canada, credit card debt was $62.4 billion across the country in October, nine per cent higher than the same month last year.
Really, who can blame Canadians? By the gauge of many economists, shopping is about the only way consumers can take control of the economy, so in many ways, so long as it’s done within reason, spending does just as much for us as it does Canada during the holidays.
When those bills come in the mail in January, Canadians will sober up and reign things in, sure. But in the meantime, petty debt isn’t going to ruin what makes the holidays special for millions of Canucks: giving.
By Jason Buckland, MSN Money
Posted by: M. D. | Dec 25, 2021 12:21:01 AM
Some benefits of using my credit cards responsibly during holiday shopping are: Extended warranty, better way to track my spending, convenience, online shopping for great deals, rewards points and being able to hang on to my money a little bit longer until the bill is due thereby accumulating interest. Cash and debit don't offer any benefits and in some cases you might be charged interac fees. So yes, as long as you know your limits, stick to a holiday budget and use credit cards wisely I don't see the point of using anything else.
Posted by: paul | Dec 25, 2021 9:57:33 AM
I guess you haven't heard of ING Direct where there are 0 (ZERO) banking fees. They even give you $50 just for signing up!!! check out the thrive program and enter this code=35972883S1 when you open your new account and to receive your instant $50 !!!!
Posted by: Trixie | Dec 25, 2021 11:48:22 AM
I think I have a better deal than ING Direct. My credit card gives me about an extra 20 bucks to spend per month. I either can use that to pay off bills or shop more. My choice!
And, because I have good credit I get no interest. (although I pay off the balance most months) December will be no exception. (I would have banking fees with a debit card and therefore don't use one.)
Posted by: Canadian Mortgages Inc | Dec 29, 2021 4:01:17 PM
The general public only has one way to have impact on the economy - that is with their wallet. Spending is up this holiday season and that can have a positive impact on the overall economic picture, but if spending is up due to the overuse of credit, the impact will be very short lived. Credit is a mainstay of life in todays world, and using it wisely can help not only the Country's financial health, but the individuals as well.