New research shows Victoria had the highest credit card debt per capita across the country in 2023.
The study, conducted by Savvy New Canadians, ranked the top 10 cities with the highest levels of credit card debt in Canada over the last year.
Victoria ranked the highest with $12,874 of credit card debt per capita.
Vancouver ranked second, about $500 less, with $12,332 per capita, while the third-place ranking saw a significant drop, with Oshawa at $7,505 per capita.
The research also found Victoria ranked second in the country for consumer debt behind Vancouver.
David Leneveu, Rockmoor Wealth Management chief CEO, said the numbers reflecting B.C. cities are likely linked to rising inflation costs and the province’s housing costs.
He added the additional uptick of credit card debt for those in Victoria could be because of increased travel costs added to a person’s budget.
“People in Victoria tend to travel back and forth to the mainland, so a lot of travel whether it be ferry or air costs,” Leneveu said. “Fuel obviously on the Island is a lot more expensive than it is in the interior, with the exception of the mainland and Vancouver.”
He said as all these costs continue to rise, more people turn to their credit cards to help.
Leneveu explained one thing that’s bad with that is interest rates continually fluctuate.
“If interest rates continue to rise, we don’t know where they are going to be in the next 12 to 24 months, but if interest rates suddenly jump more and your debt is really high, you could put yourself underwater very quickly,” he said.
Even though it’s difficult, paying off all high-interest bad debt as soon as you can is the best thing to do, according to Leneveu.
He said the first thing people with high debt should do is create and stick to a budget, which likely includes reducing or eliminating discretionary spending.
The second thing to look at is consolidating debts.
“If you have bad debt of any sort, you can consolidate that into a cheaper debt such as secured lines of credit or even unsecured lines of credit, you’re going to pay way less in interest than you would on a credit card debt,” Leneveu said.
He added that each person’s financial situation is different, and it would also be wise to talk to an advisor about options that would best suit your needs.
Leneveu said once the debt is paid off, then people should start paying themselves by taking some of the money they would use for debt bills and saving or investing it for long-term goals.
“Becoming wealthy takes a long period of time, nobody is going to get wealthy overnight unless you get very lucky,” Leneveu said. “Just understand it will take years and years to do, but you will be much better off starting today.”