2025 Canadian Consumer Credit Card Report

Credit cards have become an indispensable lifeline for Canadian budgets battered by the high cost of essentials. Nearly three in four Canadians (74%) used credit cards to pay for essential purchases in the past 12 months, according to a new NerdWallet survey of 1,017 Canadian adults, conducted by The Harris Poll from April 24-28, 2025.

The data paints a complex and compelling financial picture: one shaped by rising costs and the trade-offs Canadians are making to recalibrate and stay resilient.

Key findings

“For the most part, Canadians are tapping into the key values that credit cards provide while paying off debt quicker,” says Georgia Rose, credit card expert at NerdWallet Canada. “But with half the country carrying a balance, it’s important to continually monitor your credit card usage — don't overspend just to snag a few extra reward points.”

Credit card use for essential purchases is on the rise

Essential purchases continue to take a bigger bite out of household budgets. The average Canadian family of four is expected to spend $16,833 on groceries in 2025 — an increase of over $800 from last year, according to Canada’s Food Price Report 2025. It comes as little wonder that Canadians may be more frequently tapping their credit cards to cover the cost of essentials. Nearly three-quarters of Canadian adults (74%) used credit cards to pay for essential purchases in the past 12 months — up slightly from 69% a year ago.

Credit card use differs across generational cohorts

Not all age demographics swipe their credit cards at the same rate for essentials. In the last 12 months, older generational cohorts led this trend: 82% of Baby Boomers (ages 61-79) and 77% of Gen Xers (ages 45-60) pulled out a credit card to cover the cost of an essential purchase. In contrast, younger generations are less likely to do so, with just 68% of Millennials and 60% of Gen Zers (ages 18-28) following suit.

While younger age cohorts are less likely to have used credit cards than older generations for household necessities, they have embraced flexible repayment options at a significantly greater rate. Nearly a quarter of Gen Zers (23%) and 21% of Millennials leveraged their credit cards’ built-in buy now, pay later option to pay for essential purchases in the last 12 months, compared to just 7% of Gen Xers and a mere 2% of Baby Boomers.

Climbing costs for goods and services continue to sway Canadian credit card habits

As the ballooning cost of essentials puts pervasive strain on Canadian wallets, it’s unsurprising to see consumer financial habits shift in response. Over half of Canadians (52%) say their credit card habits changed over the past 12 months. Among them, the top reason for the change is higher prices for goods/services (60%). Major unexpected purchases (31%) were another factor.

Employment changes disproportionally impact the finances of younger generations

The complicated swath of financial pressures Canadians face today spans the ever-ascending cost of living, a housing crisis, tariff-related price hikes and a highly competitive job market. Some of these budget stressors may be hitting the wallets of younger Canadians more acutely than some of their older counterparts.

Nearly half of Gen Zers (45%) and over a quarter of Millennials (27%) who adjusted credit card habits over the past 12 months cited reduced income as a result of employment changes as a reason for this change, compared to just 19% of Gen Xers.

Shelter costs are shaping financial habits, too. Over a quarter (26%) of Millennials who say their credit card habits have changed over the last 12 months say it’s because mortgage payments or rent required more of their monthly income. Housing costs also pressured Gen Xers: nearly a quarter (24%) cited raised mortgage or rent payments as an influencing factor on their credit card habits over the past 12 months. And 14% of Gen Zers cited the same.

A majority of Canadians have credit card debt

Fifty-four percent of Canadians say that they currently have credit card debt. Leading the generational debt load are Millennials: 72% say they currently have credit card debt compared to 61% of Gen Zers, 57% of Gen Xers and just 34% of Baby Boomers.

The proportion of Canadians carrying credit card debt is nearly unchanged from the 55% reported last year. But while the share of Canadians carrying credit card debt has stayed relatively steady, the weight of that debt has never been higher. Canadian credit debt hit a record $2.5 trillion in 2024, according to a TransUnion report.

As traditional credit card debt creeps to unprecedented heights, Canadians continue to explore alternative credit options. Our survey revealed usage of various credit fallback strategies over the past 12 months is on par with last year’s results: buy now, pay later usage is at 12% (11% last year), balance transfer offer applications is at 8% (6% last year), and credit card loans are at 6% (5% last year).

Still, amid the growing shadow of debt, a spark of optimism remains: repayment confidence may be on the rise. Of the Canadians with credit card debt, 45% think it will take them six months or longer to pay off, down slightly from 51% a year ago. Bolstered repayment confidence may be a reflection of the increased uptake of alternative payment methods to manage debt obligations.

Rewards programs drive Canadian credit card decisions

Narrowing down your credit card options is no easy feat. Whether you’re applying for your first card, chasing an attractive welcome bonus, rehabilitating your credit or adding to your card roster, there’s a lot to consider before you submit an application.

So, what makes or breaks the decision? The top two most important factors for Canadians choosing a new credit card are rewards (70%) and annual fees (67%). Canadians are additionally swayed by sign-up bonuses (35%), ongoing interest rates (25%) and travel perks (24%), among other factors.

Rewards may reign in the credit card comparison game, but how points are being utilized is another matter entirely. One third (33%) of Canadians report redeeming credit card rewards to pay for essential purchases in the past 12 months, proof that for some, loyalty points have morphed from aspirational vacation fodder into right-now budget relief.

Stronger creditworthiness remains a popular goal for Canadians

About two in three (68%) Canadian adults say they’re currently working to improve their credit score, while the rest say it’s not a current focus. Among them, some roadblocks to a better credit score include having a low credit limit (18%), not being able to make debt payments on time (16%) and being unable to get approved for a credit card (11%).