What credit card habits reveal about Canadian households

Age, education and even regional differences influence whether people pay off their balances or fall behind, new research reveals.

Drs. Khan Jahirul Islam and Julien Picault, with the UBC Okanagan Department of Economics, Philosophy and Political Science, analyzed five waves of national data from Statistics Canada’s Survey of Financial Security, from 1999 to 2019.

Their findings, recently published in the International Journal of Bank Marketing, paint a picture of growing reliance on credit and the associated financial stress.

“About one in three Canadian households carries credit card balances,” says Dr. Picault. “And among those, more than two-thirds skip or delay payments due to financial difficulties.”

The study tracks long-term patterns in repayment behaviour, asking not just who uses credit cards but why some Canadians pay them off each month while others do not.

The results point to a divide: younger households led by women with larger families are more likely to carry balances. On the other hand, those with university degrees, savings or stocks are significantly more likely to stay current on payments.

“Education was one of the strongest predictors,” explains Dr. Islam. “People with a university degree were 13 per cent more likely to pay off balances and 19 per cent less likely to skip or delay payments, compared to those without a high school diploma.”

Other findings stand out. Households carrying payday loans were 25 per cent less likely to pay off balances and 28 per cent more likely to miss payments, while those expecting their financial situation to worsen were paradoxically more likely to pay off debt, suggesting a mindset of caution when money is uncertain.

Dr. Picault says the data highlights structural and behavioural patterns that have persisted over time. “Whether we looked at the year 1999 or 2019, many of the same factors kept showing up.”

The study also raises questions about financial literacy, access to affordable credit and the role of housing debt. Households with mortgages were more likely to make payments below the minimum required, while those with lines of credit or liquid assets were less likely to fall behind.

As for solutions, the authors point to education and regulation. “Financial education clearly plays a role,” says Dr. Islam. “But regulation matters, too, especially around payday lending and access to lower-cost credit options.”

The researchers say their findings could help shape future policy and outreach efforts, especially as credit card use continues to climb in Canada.

They also see opportunities for more targeted support, particularly for women-led, lower-income and younger households.