The debt gap nobody talks about
A few weeks ago, I found myself looking up the word for debt in my first language—not because I thought it didn’t exist, but I was trying to understand why debt still felt so foreign to me despite living in Canada for seven years.
The word was there, but nobody had ever taught it to me.
Growing up, I had learned the word for a loan. A loan made sense: you borrowed money for a specific purpose, paid it back, and moved on with your life. Debt felt different, it was ongoing. Persistent. Something that lingered in the background long after the original purchase had been forgotten.
The more I thought about it, the more I realized the issue wasn’t language at all—it was culture.
You learn the words your culture thinks you’ll need. While debt certainly exists around the world, the role it plays in people’s lives varies dramatically. Some cultures are built around borrowing and leveraging debt; others place greater emphasis on saving first and borrowing only when absolutely necessary.
That distinction matters more than most people realize because when newcomers arrive in Canada, they are not simply learning a new financial system, they are often learning an entirely new relationship with money.
The vacation we never took
Long before we moved to Canada, my wife and I were planning a vacation together. She suggested putting the trip on a credit card, but I couldn’t understand why anyone would borrow money for a vacation. More importantly, I didn’t even have a credit card.
Neither of us was wrong, we were simply operating from different financial cultures. From my perspective, if we didn’t have the cash available, perhaps we should book a different trip. For her, a credit card was a practical financial tool and the vacation wasn’t unaffordable, it was just being paid for differently.
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We still took a holiday, just not the one we originally imagined because we limited ourselves to what we could afford with the money we had available at the time.
Looking back, that conversation had very little to do with vacations—it was really about debt, and, more specifically, our vastly different comfort levels with it.
My first credit card mistake
Eventually, I did get a credit card, and like many people who receive their first credit card without fully understanding it, I made a mistake: I treated it like free money. Predictably, that did not end well.
The experience was uncomfortable, but it was also educational. The lesson wasn’t that debt is bad, but that debt is a tool. A hammer can build a house or break a window, and the outcome depends less on the tool and more on how it is used.
Debt works the same way: a mortgage can help build long-term wealth, a student loan can create opportunities that would otherwise be out of reach, and a credit card can help establish a credit history and provide flexibility when used responsibly.
But none of those benefits are obvious when you are first introduced to borrowing. If you arrive carrying cultural beliefs that view debt with skepticism, caution, or even shame, you are probably not going to ask for the instruction manual.
Canada assumes you already understand debt
One of the most surprising things about Canada is how much of everyday financial life is built around debt. Not necessarily bad debt, just debt.
Mortgages, credit cards, student loans, lines of credit, home equity lines of credit, credit scores—the entire system assumes a certain level of fluency with borrowing. It assumes you understand how debt works, how it affects your credit profile, and how it can be used strategically. It assumes you arrived with that knowledge already installed.
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But many newcomers don’t. And it’s not because they are financially irresponsible, but because they are navigating a system built around financial norms that may not exist in the places they came from.
The challenge is that debt is no longer reserved for major purchases. Increasingly, borrowing has become embedded into everyday spending decisions. Buy now, pay later plans have exploded in popularity, allowing consumers to split purchases into smaller payments with a few clicks. Furniture, electronics, clothing, concert tickets, and, in some cases, even lunch can now be financed. You can effectively buy a burrito on credit.
For consumers who understand how these products work, they may be useful tools within reason. For those who don’t, particularly newcomers still learning Canada’s financial system, they can create problems surprisingly quickly because borrowing no longer feels like borrowing.
A financial literacy problem, or something deeper?
Recent TD research found that 79% of newcomers found it difficult to start building credit, despite 92% understanding its importance before arriving. The same survey found that 82% of newcomers who applied for credit encountered barriers, while 31% qualified only for credit limits that were too low to meet their needs.
Those numbers are often discussed as financial literacy challenges but I think they’re something deeper. They are worldview challenges.
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A financial literacy problem can be solved with information; a worldview problem is harder. You cannot bridge a worldview gap with a brochure or a webinar. You can explain how a credit score works, how interest accumulates, or why paying a credit card balance on time matters.
What is much harder to explain is why borrowing money is considered normal in one culture and something to be approached far more cautiously in another, or why one person sees a credit card as a financial tool while another sees it as a potential trap.
Those beliefs run deeper than financial products and shape how we think about money itself.
Crossing more than a border
Statistics Canada reported that Canadian households owed approximately $1.77 in credit market debt for every dollar of disposable income at the end of 2025. Household credit market debt surpassed $3.2 trillion.
Those are enormous numbers, but they also tell us something important about Canada.
Debt is not viewed solely as a last resort, but as a tool that helps people buy homes, pursue education, build businesses, and navigate major life expenses. That perspective is not inherently right or wrong, it is simply different.
And when people move countries, we often focus on the obvious adjustments: language, weather, employment, and housing. What we talk about far less is how much money itself can mean different things in different places.
How newcomers can build a healthier relationship with debt
If you are new to Canada and still trying to make sense of the country’s relationship with borrowing, here are a few lessons I wish someone had shared with me earlier.
1. Learn the difference between debt and bad debt
Not all debt is created equal. A mortgage, a student loan, and a maxed-out credit card may all technically be debt, but they serve very different purposes. Before deciding whether debt is good or bad, understand the role that it is intended to play.
2. Build credit before you need it
One of the most common newcomer mistakes is waiting until you need credit to start building credit. In Canada, your credit history influences far more than borrowing. It can affect rental applications, mortgage approvals, and access to financial products. Building credit does not mean carrying debt; it means demonstrating that you can use credit responsibly.
3. Don’t confuse access with affordability
Just because a lender approves you for a certain amount doesn’t mean you should borrow it. Your borrowing limit is not a spending target. Build your budget around what you can comfortably repay, not what a bank says you qualify for.
4. Treat buy now,pay later like any other debt
Many people mentally separate buy now, pay later purchases from traditional borrowing. They shouldn’t. Before splitting a purchase into multiple payments, ask yourself a simple question: Would I still buy this if I had to pay for it in full today? If the answer is no, that tells you something important.
5. Ask questions
This sounds obvious, but it matters. Newcomers spend enormous amounts of time learning about immigration rules, housing markets, and employment opportunities. Spend the same energy understanding how borrowing works. The return on that investment is often far greater than people realize.
The lesson I wish someone had taught me sooner
The biggest financial lesson I learned after moving to Canada wasn’t how to build credit. It wasn’t how to invest, or how mortgages work. It was understanding that debt is neither a moral failure nor a financial goal, but simply a tool. And like any tool, it can create opportunities when used thoughtfully and problems when used carelessly.
The challenge for many newcomers is not learning how debt works, but more about understanding why it matters in the first place.
If you grew up in a culture where borrowing wasn’t central to everyday life, you may not realize that you are carrying a completely different set of assumptions into every financial decision you make.
Until someone explains that, the instruction manual can be surprisingly difficult to find.
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Read more for newcomers in Canada:
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- What replacing my tires taught me about planning for retirement
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