A new report from the credit monitoring firm Fairphone suggests Canadian banks aren’t paying customers for their credit cards.
The report, which looks at the amount of time Canadians spent on their credit card statements over the past three years, found that the average Canadian spent over $3,000 per month on credit cards at the end of 2016, but that it only spent $2,000 on purchases in 2017.
“While the majority of Canadians spend on their mobile phones, there are a large number of Canadians who do not, either because they are using other devices or have no other means of payment, such as a credit card,” the report said.
“A large majority of these consumers are spending a large portion of their monthly income on mobile phone payments, even when they have to pay for basic necessities such as groceries and rent.”
The reason for this is that, while many Canadians are able to use their mobile devices to pay their bills, they are not necessarily making the same amount of purchases on their own, which creates a disparity in the payment that consumers are able in terms of the amount that they can spend on the cards they use.
“The report notes that it is important to understand that while many credit card accounts have a balance due, it is the amount the cardholder actually spends on the card that is most important.”
Luffey also said that, for the most part, Canadians are spending money they earn.””
The difference between a consumer spending more than they need on a credit or debit card, versus the amount they spend on other goods and services is the difference between paying off the balance and not.”
Luffey also said that, for the most part, Canadians are spending money they earn.
“In terms of where they spend the money, it varies,” he said.
In the end, Luffay said the most important thing is for consumers to understand how their credit balances are set up.
“What we are trying to do is get a sense of the balance on the credit cards that Canadians are using, and how much they are spending, to see what the situation is, so that they may make better decisions,” he added.
“Ultimately, that will help us make better financial decisions.”
Fairphone’s findings suggest the Canadian consumer has a number of different options when it comes to setting up their personal financial account, from having their bank account electronically charged for their card use to making a monthly payment that doesn’t count against the card’s balance.
Luffay also suggested that people who use their own cards are spending more money on their cards than those who have an ATM.
“For example, a consumer who doesn’t have an existing credit card is spending a lot more on their card than if they had a credit and debit card account, and the balance is higher on the debit card,” he explained.
“It’s a very, very small amount, but it’s a significant difference in terms for a consumer to spend.”
Loughey also noted that the amount Canadians spend in their bank accounts has fluctuated over time.
“Some of the most recent data that we have is that there is a significant drop in interest rates over the last few years, but the consumer spending on their bank cards has not,” he noted.
“So there’s a balance between the amount people are spending on credit and the amount those people are actually spending on the bank cards they have.”