Canadian consumer debt up some six per cent at end of 2012: TransUnion

TORONTO – A new report says the level of Canadian consumer debt at the end of 2012 — not counting mortgages — was up nearly six per cent from a year earlier.

TransUnion says the $1,525 jump from the end of 2011 was the biggest year-to-year fourth-quarter increase since 2008.

The quarterly analysis estimates the average Canadian owed a total of $27,485 as of Dec. 31 for things like car loans and leases, credit cards and lines of credit.

British Columbia was the only province to show a decline, of just under one per cent.

The provinces with the biggest increases were Alberta (11.2 per cent), Quebec (9.4 per cent) and Prince Edward Island (nine per cent).

Albertans also had the highest average debt at $37,377 — nearly $10,000 above the national average, although British Columbia residents were close at $37,244.

Still, TransUnion noted that delinquency levels continue to remain low.

According to the last calculation from Statistics Canada, the average household owes 165 per cent more than it earns in annual disposable income, meaning an average family with $100,000 annual disposable income owes $165,000.

Bank of Canada governor Mark Carney and Finance Minister Jim Flaherty have repeatedly warned Canadians that interest rates will eventually rise, pushing up the cost of borrowing.

While Carney hasn’t moved off that message, he modified it slightly last month.

In January, the Bank of Canada said interest rates will need to stay at low levels longer after conceding it misjudged the strength of the economy and reduced its outlook for inflation.

It felt free to issue such an advisory, the central bank said, in part because it was less worried about those record levels of consumer debt and the housing market, both of which economists have said appear to be moderating.




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Canadian consumer debt up some six per cent at end of 2012: TransUnion

  1. Just because borrowing costs are at all time lows doesn’t mean you own the money you’re borrowing, and it still means you’re paying on top of the cost of whatever you’re ‘buying’ with someone elses money. My bank and credit card company keep sending me information of how easy it is to go deep into debt. They can forget it, I’m not buying what they’re selling. I expect my bank to grow my savings and they can earn their money that way, not from trying to get me to make massive loans. http://northenloans.ca/instant-cash.html

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