The Credit Counselling Society’s 2026 Consumer Debt Report paints a clear, worrying picture: more Canadians leaned on credit cards this past year, and many paid barely more than the minimum. Everyday spending increasingly happens on plastic, while progress toward paying down principal remains limited.
A familiar dynamic helps explain why. Rising living costs squeeze household budgets, and payment options that emphasize low monthly amounts make credit feel affordable in the moment — even when the long-term cost is much higher. The result: most accounts stay current, but balances don’t fall. People describe feeling emotionally overwhelmed, resigned, or simply numb about their finances.
How credit use shifted — and what it means
– Credit-as-cash: The report finds a notable shift toward revolving credit for routine expenses. About 42% of respondents used credit cards more often in 2026 than the year before (up from 35%). That’s a lot of everyday spending being funded with interest-bearing balances.
– Shallow repayments: At the same time, 52% of people carrying debt said they paid only slightly above the minimum due. Making the bare minimum keeps payments manageable now but drags out repayment and increases total interest paid.
– Incentives matter: Product interfaces, marketing messages and default payment options nudge behaviour. When apps highlight a small monthly payment or default to minimums, consumers often choose short-term affordability over faster principal reduction.
Who’s most affected and how behaviour varies
Different age groups are responding in distinct ways. Millennials (roughly 30–45) appear more likely to take pre-emptive steps and took on less new debt than Gen X and Gen Z. Gen X reported more anxiety about balances. Baby Boomers still carry bigger average balances but tend to report fewer negative emotions about money.
Across the sample, 46% of Canadians said their total debt rose over the past year (including mortgages); only 28% said their debt decreased. Among those with debt, 73% changed lifestyles to manage obligations, while nearly 23% waited until debt became critical or took no action at all.
Short-term fixes, long-term risk
The pattern resembles triage: people use credit to plug recurring gaps instead of restructuring budgets. That raises vulnerability to interest accumulation and leaves households exposed to income shocks like job loss or unexpected bills. Case studies in the report show a recurring outcome — repeated use of deferred-payment options tends to preserve or grow outstanding balances over time.
Practical levers and policy implications
There are several concrete tactics that can help:
– Automated “minimum-plus” payment rules to nudge faster principal repayment.
– Targeted financial-literacy nudges for younger account holders and those most likely to slip into shallow-repayment cycles.
– Incentives that reward payments above the minimum.
Metrics to watch include average balance trends, the share of accounts paying only minimums, and month-over-month repayment increases. Better disclosures and clearer cost comparisons could also help correct incentive structures for lenders and consumers alike.
Emotional toll and rising numbness
Financial strain shows up beyond bank statements. Nearly half of respondents said their emotional response to finances was neutral compared with the previous year — a sign of emotional blunting rather than stability. Peta Wales, CCS president and CEO, describes that neutrality as “numbness”: repeated pressure dulls urgency and can reduce the motivation to change course.
Consequences spill into relationships and health: among Canadians whose debt rose last year, 52% lost sleep over money and 34% reported physical illness linked to financial stress. People may hide worries from partners or delay medical care because day-to-day budgeting crowds out longer-term needs.
Barriers to help
Stigma remains a powerful barrier. Many anxious about debt expect judgment if they seek assistance, and shame stops people from accessing help early. That hesitation makes problems more costly and harder to resolve later. Early intervention is typically both more effective and less expensive.
A familiar dynamic helps explain why. Rising living costs squeeze household budgets, and payment options that emphasize low monthly amounts make credit feel affordable in the moment — even when the long-term cost is much higher. The result: most accounts stay current, but balances don’t fall. People describe feeling emotionally overwhelmed, resigned, or simply numb about their finances.0
A familiar dynamic helps explain why. Rising living costs squeeze household budgets, and payment options that emphasize low monthly amounts make credit feel affordable in the moment — even when the long-term cost is much higher. The result: most accounts stay current, but balances don’t fall. People describe feeling emotionally overwhelmed, resigned, or simply numb about their finances.1
A familiar dynamic helps explain why. Rising living costs squeeze household budgets, and payment options that emphasize low monthly amounts make credit feel affordable in the moment — even when the long-term cost is much higher. The result: most accounts stay current, but balances don’t fall. People describe feeling emotionally overwhelmed, resigned, or simply numb about their finances.2