Canadian consumers have set a new debt record of $1.513 trillion a year in the third quarter, compared to $1.448 trillion in the second quarter, according to Equifax Canada’s Q3 2014 National Consumer 513 tCredit Trends report.
Canadian consumer debt increased by 4.5% in Q3 versus Q2 2014, and by 7.4% compared to Q3 2014.
The greatest increases were seen in the auto loan and installment loan sectors, which grew by 6.8% and 5.8% respectively.
Excluding mortgages, the average Canadian consumer held debts of $20,891 in Q3 2014, a 2.7% increase on the same quarter last year.
Regina Malina, senior director of decision insights at Equifax Canada, said:
“Following a frenzied start to the festive shopping season with more to come in the countdown to Christmas, we can expect the consumer debt to rise even further. ‘Tis the season, so we can anticipate credit cards getting a strong workout throughout December.”
Source: Equifax Canada.
Despite record debt figures, the delinquency rate continued going down, reaching its lowest rate in six years. Compared to last year, the delinquency rate was 1.1% down.
Ms. Malina said:
“While the debt numbers are worrisome, it’s certainly positive to see delinquency and bankruptcy rates inch down each quarter. The fact is, while debt figures have gone up, they have increased at a slower rate in the third quarter with most Canadians seemingly still spending within their means.”
Third quarter demand for credit was higher than in the same quarter last year, driven mainly by auto credit and credit card business.