Canadians looking for breathing room on credit card debt are running into a harsh reality in 2025: the financial products that offer the fastest relief are often reserved for borrowers whose credit is still in solid shape. That is becoming a problem for a growing number of households, especially as missed payments and consumer debt both move higher.
New credit data shows that nearly 1.4 million Canadians missed at least one credit payment in the second quarter of 2025. While that figure was slightly lower than the previous quarter, it was still 118,000 higher than the same period a year earlier. Over the same stretch, average non-mortgage debt per consumer climbed to $22,147, a sign that borrowing pressure has not eased even as affordability remains strained.
For many people carrying expensive credit card balances, a balance transfer card can look like the simplest solution. These cards typically allow borrowers to move debt from a high-interest card to a new one with a promotional rate that can be far lower, sometimes close to zero, for a limited period. Used properly, that window can help a borrower pay down principal faster instead of watching interest charges eat up each monthly payment.
But that option comes with an important limitation: lenders usually want to see good credit before they approve the application.
Why balance transfer cards remain out of reach for many borrowers
In Canada, most balance transfer cards are aimed at applicants with credit scores of around 660 or higher. That puts them in the “good credit” range, but lenders rarely look at the score alone. They also review income, existing debt, recent applications for new credit and whether current accounts are being managed properly.
That last point matters more than many borrowers realize. Someone may still be employed and making regular payments overall, but even one recently missed payment can weaken an application. Lenders tend to view missed payments as a warning sign that repayment stress is already building. If the account carrying the balance is no longer in good standing, the odds of being approved for a balance transfer card can fall sharply.
There is another catch. Applying for credit usually triggers a hard inquiry, which can shave a few points off a borrower’s score for a period of time. One application may have a modest impact, but multiple applications within a short window can make an already fragile credit profile look worse.
That creates a frustrating cycle for borrowers trying to lower borrowing costs. The people most eager to move high-interest debt are often doing so because they are already under pressure. Yet that same pressure can damage the credit profile required to unlock the product.
How missed payments can change eligibility quickly
Payment history remains the most important part of most credit scoring models, making up roughly 35% of the score. In practical terms, that means a borrower with otherwise decent credit can still see meaningful damage from a late payment. A payment reported 30 days late can reduce a score by 60 to 80 points, depending on the borrower’s starting point and overall file.
For someone sitting just above the approval line, that drop can be the difference between qualifying for a low-rate transfer card and being declined outright. It is one reason financial setbacks can escalate quickly. A missed payment does not just lead to late fees or added interest on an existing card; it can also close off better refinancing options at exactly the wrong moment.
The strain is not being felt evenly across the country. Equifax Canada’s numbers suggest that Canadians without mortgages are missing payments at far higher rates than those with home loans. Roughly one in 19 non-mortgage holders missed payments, compared with one in 37 mortgage holders. The divide has widened considerably since 2019, showing that financial stress is hitting some groups much harder than others.
Younger adults appear especially exposed. Consumers under 36 carried average non-mortgage debt of just over $14,300, while their 90-plus-day non-mortgage delinquency rate rose to 2.35%, up nearly 20% from a year earlier. That matters because younger borrowers are also among the most likely to carry revolving credit card balances while dealing with higher housing, food and transportation costs.
According to Equifax Canada’s explanation of how credit scores are calculated, payment history and credit use remain two of the biggest drivers of creditworthiness. That helps explain why borrowers can lose access to attractive credit products even if the underlying problem started with only one or two financial missteps.
What borrowers can do if their credit score has slipped
A score below 660 does not mean all debt relief options disappear. It usually means the menu of choices changes.
Debt consolidation loans can still be available through some credit unions and licensed lenders, including for borrowers with lower scores than premium credit card issuers typically accept. The rates may not be as attractive as a promotional balance transfer offer, but they can still be well below the interest charged on many credit cards. A fixed repayment schedule can also help borrowers see a clearer end point.
Secured credit cards may be another useful tool, especially for those focused on repairing damaged credit. These products require a cash deposit that usually becomes the card’s limit. They are not designed for balance transfers, but they can help rebuild trust with lenders if payments are made consistently and reported to the credit bureaus.
It can also make sense to speak directly with the current card issuer. Some lenders will work with borrowers by offering a temporary reduction in interest, a hardship arrangement or a more manageable repayment structure. That will not be available in every case, but asking early is usually better than waiting until the account falls deeper into trouble.
For people whose debt has moved from stressful to unmanageable, more formal support may be necessary. Non-profit credit counsellors can help build debt management plans, while Licensed Insolvency Trustees can assess whether a consumer proposal or bankruptcy should be considered. Those are serious steps, but for some households they provide a realistic route to stability.
How to improve approval odds before applying again
Borrowers hoping to qualify for a balance transfer card later should focus less on speed and more on consistency. The biggest goal is to establish a clean stretch of on-time payments. Even paying only the minimum due by the deadline is better than missing a payment while trying to make a larger one later.
Lowering credit utilization also matters. That means bringing down balances so that less of the available limit is being used. In general, keeping utilization under 35% can help strengthen a credit file and signal better control over borrowing.
Checking credit reports before applying is another smart step. It helps borrowers understand where they stand without adding another inquiry, and it can uncover reporting errors that may be dragging a score down unnecessarily.
For Canadians carrying expensive debt, the message is clear. Balance transfer cards can still be a valuable tool, but they are not automatic lifelines. In a year marked by rising missed payments and higher debt loads, eligibility increasingly depends on maintaining just enough financial stability to qualify before credit damage deepens.
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