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Trans Union credit agency reported in December that Canadians continue to rack up more debt, although the speed at which they are piling it on is beginning to slow.
The average debt for about 24.8 million Canadians tracked by the report (which excludes mortgages) rose to $25,163 – a 4.3% increase over the third quarter of 2010 compared to a year ago. The main source on non-mortgage debt for Canadians is vehicles, with credit cards being a distant second.
Despite the increase in the amount of debt, delinquency rates and past-due balances have decreased year over year with credit card delinquency rates dropping 10% in the third quarter compared to a year ago when the Canadian economy was just beginning to recover from recession.
A positive sign that Canadians are slowly managing themselves out of recession is confirmed by a significant decrease in past due balances (outstanding debt that is at least 30 days past due), which has dropped 15% over the past year following three years of increases.
Canadian average credit card debt increased to $3,709 from the previous quarter’s $3614, but fell 1.7% compared to a year ago while average auto loan debt increased to $16,183 from the previous quarter’s $15,135, up 9.8% from a year ago.
Bank of Canada governor Mark Carney continues to voice concerns over consumer debt and the ability of borrowers to meet their payments once interest rates begin rising again.
“The rich rules over the poor, and the borrower becomes the lender’s slave.”
Proverbs 22:7