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Canadians taking on more debt, but also getting better at paying it back

by | Sep 25, 2014

Canadians taking on more debt, but also getting better at paying it back. The Financial Post reports this on debt:

Credit monitoring agency Equifax says Canadians racked up more debt in the latest quarter, driven by mortgages and higher instalment loans.

Data compiled for the second quarter shows that overall consumer debt, which includes mortgages, grew 7.2% to $1.45 trillion from $1.35 trillion a year ago.
Debt also grew 1.8% from the first quarter.
However, the rate of delinquencies fell to its lowest level since the recession began to unfold five years ago.
The national delinquency rate, which tracks bills overdue by 90 days or more, fell by 2.8%, while consumer bankruptcies dropped by 5% compared with the same time last year.
On average, Equifax says Canadians held $20,759 in debt without factoring in mortgages.
Albertans are the leaders for new credit demands, the report says, with requests rising for five consecutive quarters.
Equifax says instalment loans — or scheduled payments — increased 10.8% while mortgages grew 9.2%. The credit card sector was up 4.4% over the same time last year.
“Demand for new credit is up, but has slowed significantly versus the first quarter when we saw a spike in credit card activity,” says Regina Malina, senior director of decision insights for Equifax Canada.
“Credit card balances of new cardholders continue to increase, while credit limits and new card issuance have slowed.”
During the first quarter, the credit monitoring agency noted that more new credit cards were being issued, but with consumers carrying smaller balances.
Malina says the slower increase of demand may be an indication that credit card issuers are starting to wrap up recent promotions to sign new cardholders.

Remember, GLM Mortgage Group offers a full range of financial services, not just mortgages. If you need assistance in any way with your financial story we would be pleased to assist.

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