Canadians struggling with the rising cost of living are increasingly turning to debt in order to cover their expenses, according to an Equifax report released Thursday.  

Monthly spending on credit cards rose by 17.5 per cent in the first quarter of 2022, Equifax said. Lenders issued 31.2 per cent more credit cards to consumers in the quarter compared to the same period last year. The average spending limit on new credit cards reached $5,500, the highest it has been in the last seven years, Equifax said. 

The data shows the average Canadian now carries $20,744 in debt, excluding mortgages. 

The spending comes at time when Canadian inflation hit three-decade highs of 6.8 per cent in April, according to Statistics Canada.

“Pent-up demand and increased travel with the easing of COVID restrictions, combined with soaring inflation have led to some of the highest increases in credit card spending we’ve ever seen,” Rebecca Oakes, the vice president of advanced analytics at Equifax Canada, said in a statement. 

Total consumer debt rose to $2.3 trillion over the past 12 months, according to Equifax. 

The Bank of Canada has taken notice of runaway inflation eroding financial stability and has been aggressively hiking interest rates in order to pare down rising prices. 

The Bank of Canada hiked rates on Wednesday by half a percentage point to 1.5 per cent. Economists broadly expect the central bank to raise rates by a similar amount at its July meeting.