Most still able to handle debt: report
TORONTO—The love affair Canadians have with debt is still going strong, according to a new report by credit monitoring agency Equifax Canada.
Equifax said today its figures show that consumer debt, excluding mortgages, rose to $518.3 billion through the end of November.
Despite the increase in debt, however, the overall delinquency rate—bills due past 90 day—declined to a record low of 1.12 percent from 1.19 percent in the same period of 2012.
“The real pattern that we’ve been observing is that Canadians are taking on more debt, but they can handle it well and are making those monthly payments,” said Regina Malina, director of analytics for Equifax.
Meanwhile, overall consumer debt, including mortgages, also continues to rise—up 9.1 percent to $1.422 trillion from $1.303 trillion a year earlier.
Malina said the data shows that Canadians are willing to take on more debt—from car loans to credit card purchases—but are more aware of how important it is to keep their debt levels under control.
High debt levels are not a big concern in current conditions, which signal a stabilizing economy, improvement in the unemployment rate, and an anticipated gradual increase in interest rates.
But Malina said if any or all of these conditions change, Canadians should reconsider how much debt they are piling on.
“That is the reason why we should remain vigilant,” she stressed. “It’s easy to get complacent.
“Even if the debt is up, and the delinquency is going down, it is no cause for alarm.
“But as I said, we have to watch out for these other economic factors,” Malina reiterated.
Equifax uses data from 25 million files on consumer credit history, including national credit cards, loans, and mortgages in compiling the report each quarter.