Consumer Debt in Canada Remains Flat

Canadians depended less on credit during the holiday season, a time of year when debt usually increases, and delinquency rates are declining.

Average consumer debt in Canada remained nearly the same between the third and fourth quarters of 2013, according to new data from TransUnion.

The third to fourth quarter increase in consumer debt to end 2013 was only .05 percent. It was the lowest increase amount documented since the third quarter of 2011. Total debt usually increases at the end of the year because of the holiday shopping season, according to TransUnion’s Vice President of Analytics and Decisioning Services Tom Higgins.

“Total debt in the fourth quarter remained essentially flat, which means Canadians may have begun potentially deleveraging, utilizing less credit this past holiday season,” he said.

Overall, total consumer debt decreased by .42 percent to $27,368 at the end of last year from $27,485 in the fourth quarter of 2012.

Delinquency rates for credit cards, lines of credit and installment loans are continuing to decline, according to TransUnion’s Senior Vice President of Product Innovation and Analytics Chris Dias. For example, credit card delinquency levels declined 19.9 percent from 2012 to 2013.

“These are significant drops, and coupled with lower debt levels in some of Canada’s major markets, this is a good story for both consumers and lenders,” Dias said. “When both delinquencies and debt go down, we anticipate consumers may find more opportunities to gain access to better credit offers and competition for their business increases.”

Source: ACA