Canadian cardholders have slacked off in credit card usage this year as consumer confidence declines after hitting an all-time high in November 2018. However, the latest Visa and Mastercard reports show consumer spending was good last year, just not as good as 2017.
Combined, Visa and Mastercard payment cards processed US$115 billion in purchase dollar volume for the final three months of 2018 for an 8.4% increase over the prior year, a 10.1% gain in 2017, and a 5.3% gain over the final three months of 2016.
Nearly 60% of Canadians pay their credit card balance in-full each month, compared to less than 50% of Americans. Of those who do not pay off their credit card balances each month, 15% pay it off most months and 47% pay more than the minimum payment, according to recent analysis by RAM Research.
About 95% of Canadians have at least one credit card. Nearly three-quarters have a credit card with a rewards program and 82% of those cardhilders says rewards is the top priority when selecting a card, according to Canadian Bankers Association.
According to the J.D. Power 2018 Canada Credit Card Satisfaction Study, Canadians place a high value on their rewards programs, so much so that 48% who switched their primary credit card during the past year did so for a better rewards program.
According to the study, two-thirds of card holders say they completely understand how to redeem rewards. Overall satisfaction is 87 points higher among this group than among card holders who say they do not fully understand how the system works. Furthermore, rewards redemption and frequency also contribute to higher satisfaction and loyalty levels.
Satisfaction is higher among card holders who realized tangible benefits by redeeming rewards in the past month, compared with satisfaction among those who redeemed 1-3 months ago; those who redeemed more than a year ago; or those who have never redeemed. Cash back and airline tickets are the top two rewards card holders choose.
Visa & Mastercard Stats
Visa Canada’s credit and debit gross accounts increased 7.0% YOY to an estimated 61 million for 4Q/18, compared to a revised 60 million for 3Q/18, and a revised 57 million for 4Q/17.
Mastercard Canada’s credit and debit gross accounts increased 13.0% YOY to an estimated 52 million for 4Q/18, compared to an estimated 51 million for 3Q/18, and an estimated 46 million for 4Q/17.
Visa Canada credit and debit cards-in-force increased 4.7%, compared to one-year ago, to an estimated 67 million for fourth quarter, compared to a revised 64 million for 4Q/17.
Mastercard Canada credit and debit cards increased 10.4% YOY to 61 million for 4Q/18, compared to 59 million for 3Q/18, and 52 million for 4Q/17.
Around 1.8 million merchants outlets accept Visa and Mastercards in Canada, according to CardData.