Canadians once again racking up personal debt: analysis

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VANCOUVER (NEWS1130) – How’s that Visa or MasterCard bill looking?

After paying those balances down a little at the start of the year, a new report finds Canadians are once again racking up personal debt.

In fact, TransUnion’s quarterly analysis of Canadian credit trends — excluding mortgages — suggests we are back on track to break credit level records by the end of the year.

“We seemed to have that one blip in the last quarter where we had the first decrease in several years and then we’re right back up to the same trajectory where we were before, we’re back up over $27,000 debt per person in Canada,” says Thomas Higgins, TransUnion’s vice president of analytics and decision services.

But as levels of debt creep up for Canadians with credit cards and personal and auto loans, it’s not all bad news.

“There was a second straight quarterly decline in lines of credit, which is important to note because it is by far the largest credit segment,” says Higgins. “Lines of credit debt has grown in the last few years, but the extent of the growth is much smaller than what we’ve observed with both auto and installment loans.”

Delinquencies are also down, as Canadians continue to keep up with their payments.

“That’s great news, as long as the interest rates hold low,” he tells News1130. “That’s the big risk. The Bank of Canada has been very good about giving us a warning  when they’re going to make changes but if they’re forced to make some drastic changes on short notice, that’s where the big risk is — Canadians won’t have an opportunity to adjust and pay down some debt before rates go up.”

TransUnion forecasts total debt to continue to grow through the remainder of the year, likely eclipsing the record high set in 2012.

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