Credit Cards in Canada

Credit card use in Canada is a prolific and a very profitable business for financial institutions. At the end of 2006 there were over 60 Million Visas and MasterCards in the pockets of 30 million Canadians. There were over 26 Million active Visa and MasterCard accounts. So, irrespective of American Express, Diner's Club, and department store cards, every man, woman, and child in Canada has 2 cards each.

What do we do with all of this available credit? We spend, a lot. Visa and MasterCard transacted over $214 Billion dollars worth of business in Canada in 2006 and were able to charge over $29 Billion dollars of interest and fees on the 26 Million active accounts.

Over the past 10 years, the number of active credit card accounts has doubled, credit card transaction volume has tripled and the profit from these transactions has quadrupled for the card issuers. Credit cards have been a high growth business to be sure.

Canadian are diligent about paying their credit card bills too. The delinquency rate on credit card balances is low at less than 1% and has remained quite low for at least 15 years. A seemingly low risk business with very large profit margins. I wonder what the future has in store.



How do you feel about the large profits being generated by the credit card companies? How do you use your credit cards? Merchant fees can sometimes be high and I often wonder how much that affects the price of the goods we buy.

My wife and I use our Visa card for nearly every purchase we make because we get cash back and don't have to carry cash or pay any banking fees for using a debit card. We also pay off our balance every month and haven't paid a cent in interest or fees since having these cards. I know that isn't necessarily typical among the general population but is likely fairly representative of the readership of this blog!