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Consumer credit usage in Canada during the coronavirus pandemic
Author(s) -
Ho Anson T. Y.,
Morin Lealand,
Paarsch Harry J.,
Huynh Kim P.
Publication year - 2022
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12544
Subject(s) - covid-19 , recession , economics , pandemic , debt , welfare economics , political science , humanities , keynesian economics , art , finance , medicine , virology , disease , pathology , outbreak , infectious disease (medical specialty)
Abstract The recent COVID‐19 pandemic has devastated economies worldwide. Using detailed, monthly data from a major consumer credit reporting agency in Canada, we have examined individuals’ use of credit cards and home‐equity lines of credit (HELOCs). We found a dramatic leftward shift in the distribution of credit card and HELOC outstanding balances, providing evidence for a widespread reduction in credit usage. Our findings suggest that, during the COVID‐19 recession, Canadian consumers were able to meet their financial needs without increasing their debt burdens. These results complement other findings concerning a decline in consumer spending and the results of government assistance programs, and imply that the economic consequences of this pandemic are very different from those in other recessions.