While delinquencies in the U.S. continue to reach historical levels, Canada is facing a delinquency crisis of its own.
A report from Equifax reveals that one in 22 Canadian consumers missed at least one credit payment during Q1. The delinquency rate rose nearly 20% year-over-year, reaching 1.43%. Young consumers were the most affected, with delinquency rates among those ages 18 to 25 increasing by 15.1%.
This trend persists even as both consumers and issuers pull back. Average monthly spending by Canadian cardholders has dropped to $107—the lowest level since March 2022.
Meanwhile, Q1 2025 also saw a 10.3% decline in new card originations. Notably, one area of growth was among consumers with lower credit scores, pointing to heightened financial stress within this group.
Cardholders Are Paying Less
Consumers feeling the pinch paid, on average, just 52.9% of the credit card balances in Q1. Those under 35 saw the most significant drop, with their average payment rate falling from 62.9% to 58.9%. This same group also recorded the largest increase in the share of cardholders paying only the minimum balance.
Equifax said the lower payments reflected excessive caution on the part of cardholders.
“Our data shows card payment levels, especially for younger consumers, are starting to fall, indicating this spending slowdown is likely driven more by consumers trying to be prudent rather than switching from credit to debit for financing,” Rebecca Oakes, Vice President of Advanced Analytics at Equifax Canada, said in a prepared statement.
Tracking the U.S.
Trends in Canada are mirroring some of the economic patterns currently unfolding in the U.S. According to the New York Fed, U.S. credit card delinquencies ticked up to over 7% in Q1 2025, up from 6.86% a year earlier.
Delinquent auto loans—those at least 90 days past due—climbed to 3% in Q4 2024, marking the highest level since 2010. Brian Riley, Director of Credit at Javelin Strategy & Research, noted that auto loans can serve as a key indicator of financial strain, especially among riskier borrowers for whom these loans represent the largest monthly debt payment.
In contrast, Canada’s auto loan delinquency rate stands at a markedly lower 1.08%. However, that figure represents a 15.3% increase over the previous year.
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