Higher living costs are pushing more Canadians to use credit cards for groceries, utilities, and other essentials, even as a growing share still manage to pay their balances in full each month.
NerdWallet Canada found that 75% of Canadians used a credit card for an essential purchase in the past year, up from 74% in 2025 and 69% in 2024.
The generational breakdown shows how roughly three-quarters or more of every age cohort used credit cards for essential purchases, with Baby Boomers highest at just above 80% and Gen Z lowest at roughly the mid-70 % range.
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That trend lines up with TD Bank’s recent finding that 70% of its clients’ spending growth now comes from groceries and convenience store purchases, up from 40% a year earlier.
Where cohorts diverge more sharply is in how they manage that credit. Millennials appear most likely to redeem credit card rewards for essential purchases at just under 50%, compared with about 40% for Gen X, the mid-30% range for Gen Z, and under 30% for Baby Boomers.
The borrowing story, however, is not a straight deterioration. NerdWallet said 55% of Canadians are now paying their credit card balance in full every month, up from 51% in 2025. Credit card balances reached a record $131 billion in the fourth quarter of 2025.
Even so, missed payments in the quarter rose more slowly than expected. Equifax Canada vice-president of advanced analytics Rebecca Oakes said in February that consumers appeared to have pulled back somewhat on credit card spending, calling that “good news.”
On new credit products, about one-quarter of Gen Z respondents and just over one-fifth of millennials opened a new credit card, versus the high teens for Gen X and single digits for Baby Boomers. Built-in buy now, pay later features on credit cards also skew younger, landing in the low-20% range for millennials, just under 20% for Gen Z, around 10% for Gen X, and low single digits for boomers.
The knowledge gap remains material. Only 45% of Canadians said they understand the risks of opening a new credit card.
Consumer decision-making is still heavily influenced by incentives. More than 41% of Canadians said a promotion or sign-up bonus drove them to choose a new card. At the same time, 67% cited rewards as a draw and 66% pointed to no annual fee.
Information for this briefing was found via Financial Post and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
