March 9, 2016

National credit card accounts, balances, limits continue to increase, deliquencies remain low

TORONTO--Following the Bank of Canada's interest rate announcement, Equifax Canada reports that delinquency rates remain at historic lows in its Q4 2015 National Consumer Credit Trends Report. When compared to the same quarter from a year ago, the 90+ delinquency rate (excluding mortgages) was unchanged at 1.09 per cent.

Delinquency rates stand as a measure on the ability to pay back loans and credit card debt, which varies across the country. Oil-producing Western provinces such as Alberta and Saskatchewan and Newfoundland and Labrador in the Eastern region are currently trending upwards, especially over the past three quarters. As it stands now though, provinces in the Western region still have the lowest delinquency rates, while provinces in the Eastern region have the highest.

"Despite the ups and downs of today's economy we're seeing that Canadians are generally able to manage debt and rein in spending when they have to," said Regina Malina, Senior Director of Decision Insights at Equifax Canada. "It may be a surprise to some, but the fact is delinquency rates in the oil-producing provinces are still relatively low. Most people are still finding a way to pay back what they owe."

In the final quarter of 2015, the delinquency rate for younger customers (under 26) was the only age category to experience an increase, rising by 2.9 per cent, which is already higher than any other age group. At the same time, the 65+ segment continued to increase debt faster than any other age group, while keeping delinquency low.

Debt is often used as a tool for consumers to accomplish their objectives. However, as people get older, their income earning capabilities generally trend downward. To increase their financial security, Canadians should develop a plan to pay off their debt within a set timeframe.

Total reported consumer debt is now at $1.621 trillion, compared to $1.587 trillion in Q3 2015 and $1.529 trillion a year ago, which represents an increase of 2.14 per cent and 6.00 per cent. On a debt classification basis, the installment loan and auto loan sectors showed significant increases of 7.5% and 5.7% year-over-year, respectively. The average consumer debt is $21,458.

National Credit Card accounts, balances and limits continued to increase when compared to the same quarter last year. Average credit card limits have increased for seven consecutive quarters, while utilization is unchanged.

Data for this report, including scores, are sourced from Equifax Canada, the repository of the majority of credit transactions that occur in Canada. There are over 25 million unique Equifax consumer credit files. Transaction volumes for data are estimated at 105 million per month. Information provided in this report was adjusted to ensure that quarterly data reflects the results as of the last month of each quarter.

Major City Analysis - Debt
(excluding mortgages) & Delinquency Rates
     
  Average Debt Delinquency Rate Change Year-over-Year 
(Q4 2015  vs. Q4 2014)
Calgary $28,421 17.0%
Edmonton $26,479 21.3%
Halifax $23,168 1.9%
Montreal $16,710 -2.8%
Ottawa $20,904 0.1%
Toronto $19,918 -7.0%
Vancouver $23,406 -7.1%
St. John's $24,421 20.5%
Province Analysis - Debt
(excluding mortgages) & Delinquency Rates
     
  Average Debt Delinquency Rate Change
Year-over-Year (Q4 2015 vs. Q4 2014)
Ontario $21,072 -6.3%
Quebec $18,070 -2.5%
Nova Scotia $21,709 2.2%
New Brunswick $22,107 -4.1%
PEI $21,483 2.4%
Newfoundland $22,766 11.8%
Eastern Region $22,053 1.4%
Alberta $27,576 25.1%
Manitoba $17,913 6.4%
Saskatchewan $23,941 14.0%
British Columbia $23,040 -5.6%
Western Region $24,246 9.0%
Canada $21,458 0.0%

 

 

 

 

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