A recent poll conducted by Ipsos Public Affairs for Global News reveals that Canadians are increasingly concerned about rising interest rates and inflation. Many Canadians fear they won’t be able to pay off debts, such as credit card bills, as interest rates continue to climb. According to the survey, 81% of Canadians are worried that inflation will make life unaffordable, while 71% are concerned that interest rates will rise faster than they can adjust.
This growing anxiety comes just as economists predict that the Bank of Canada will raise interest rates again this week. In June, the central bank surprised economists with a 25-basis-point rate increase, and many experts believe there will be another hike in the near future. If this happens, it will be the highest benchmark interest rate since 2001.
The prospect of higher rates is especially concerning for millennials, with 79% expressing worry about the pace of rate increases. They are particularly concerned about their future plans, such as buying a home, starting a family, or traveling.
The higher interest rates are also taking a toll on Canadians’ ability to pay off debt. Canada has the highest level of household debt in the G7, and many Canadians are struggling to handle their credit card bills and unexpected expenses. The survey shows that 55% of Canadians are worried about paying off their entire credit card bill, while 63% say they couldn’t handle a sudden expense of $1,000 or more.
Not being able to pay bills is a significant concern for more than half of Canadians. A separate poll from MNP, an insolvency firm, found that 52% of Canadians say they are $200 or less away from not being able to pay all their bills. This figure has increased by six percentage points since April.
Amid these financial challenges, Canadians are making significant cutbacks. They are reducing travel, dining out less, and cutting back on entertainment spending. Many are also using flyers and coupons and changing grocery stores to find cheaper products.
The impact of rising interest rates is starting to be felt on household budgets, and Canadians are feeling the pressure. As interest costs increase, people are being forced to make difficult decisions and cut expenses. However, there is only so much they can cut before finding themselves in serious financial trouble.
To manage their debt, personal finance expert Rubina Ahmed-Haq advises Canadians to consolidate high-interest debt into a loan with a lower interest rate. This can help make their debt more manageable and prevent a vicious cycle of increasing debt obligations.
Overall, the survey highlights the growing concern among Canadians about their ability to keep up with rising interest rates and inflation. It emphasizes the need for individuals to carefully manage their finances and seek strategies to alleviate their debt burden.
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