Canadians expected to pack on more debt, but manage it, in 2019: report

VANCOUVER (NEWS 113) – If you’re avoiding the credit card bill this holiday season — don’t put it off for too long.

Two new debt reports reveal Canadians are deep in the red, and rising interest rates as well as a slowing economy could make you vulnerable.

The Canadian Mortgage and Housing Corporation’s latest report says people in Vancouver have the highest debt to income ratio in the country.

At 242 per cent, Vancouverites tower over the national average of 170 per cent.

“Our expectation is that as the economic expansion in Canada continues, we expected to see a continued rise in overall Canadians’ consumer non-mortgage debt, albeit at a much slower pace than we’ve seen over the past few years,” Matt Fabian with credit monitoring company TransUnion, which is behind one of the reports, explains.

Wages are stabilizing, employment numbers are up and the GDP is growing, the head financial researcher adds.

“Canada’s really in a growth cycle, and as a result there’s more consumer confidence,” he tells NEWS 1130. “People are willing to take on additional debt, and they seem to be fairly responsible at managing that debt.”

He’s projecting growth in credit card, mortgage and other forms of debt, but don’t get too smug about your bills.

The report also forecasts a potential economic slowdown.

“Our outlook for 2019 is although debt will continue to rise, delinquency levels will remain stable,” Fabian says. “Given even though the economy is potentially slowing, we still feel like — from a credit and lending perspective — is well functioning, and we don’t see any immediate signs for concern.”

Fabian advises managing your debt, and almost stress test yourself.

“Monitor the amount of debt you carry, be responsible with it and make your payments. Stress test yourself such that if interest rates continue to go up or you’re at risk of unemployment, you’d be able to manage and still make your payments.”