Canadians more likely to ditch the credit card for cash in 2022: Finder.com survey results

Twenty per cent of Canadians want to lessen their reliance on credit cards, compared to five per cent who plan to use them more for purchases, according to a survey.

“Canadians are essentially very wary of taking on debt this year,” says Nicole McKnight, communications manager for finder.com.

It’s a comparison platform and information service that aims to provide Canadians with what they need to make better financial decisions.

“Three times as many people said they would either stop using their credit card or use it less often, than those who said they would use it more,” says McKnight.

McKnight says the results are not surprising, in the current “highly inflationary environment” where most things now cost more including food and gas.

Ian Lee, an economics professor at Carleton University agrees, but he believes, the pandemic is also playing a role in Canadian spending habits.

“Over the last two years’ people realized there's some things they don’t need as badly or as much as they thought they needed. And that drives you very quickly to your debt and your credit card,” says Lee.

He describes credit cards, specifically those from retailers as opposed to banks, as “dangerous” and “risky” forms of credit, some of which have interest rates as high as 29 per cent.

“You’ll never have a mortgage loan or a car loan that is approaching 28 per cent. Never,” says Lee.

“If you are worried about your debt and you’re worried about paying back, it’s a good place to start, to cut back on your credit cards or dial back, use them less often, or cut them up completely.”

Lee says research on the subject has proven, consumers make fewer spontaneous purchases when they use cash.

“You look at the transaction a little bit more hard-eyed than you do if it’s on a card because it's more abstract,” says Lee.

The finder.com results were part of the website’s annual Credit Card Awards, which ranked cards, in six different categories.

The survey also asked which perk was most important to Canadians.

Finder.com found, 26.5 per cent of Canadians chose a credit card with a low-interest rate.

“Five per cent (of) Canadians, or it works out to 1.6 million Canadians said they did want to switch cards because they have a card that doesn’t meet their specific needs,” McKnight says.