Average Canadian non-mortgage debt grows to $21,686
Credit reporting agency TransUnion has revealed some hard truths about the personal finances of many Canadians. A report it recently published asserts that the average Canadian non-mortgage debt has reached $21,686, a 2.3 per cent increase from this time last year.
Beyond that total sum, credit card debt specifically has risen by 2 per cent this year and hit $3,954. CBC News suggests that much of that damage has been done by instalment loans and the dangerously high interest rates that are often attached to them.
The report also provided individualized data for each province. At $27,663, Alberta came in with the highest average debt. Saskatchewan and British Columbia showed up next with $24,217 and $23,363 respectively. Quebecers had the lowest average, totalling almost $10,000 less than their counterparts in Alberta.
One positive development, however, is the delinquency rate for these debts. The national average for delinquency has remained relatively low at 2.7 per cent, which suggests that Canadians aren’t too overwhelmed by what they owe.
Yet, Reuters notes that “years of low interest rates since the global financial crisis have led to an increase in consumer borrowing in Canada,” and a previous study by TransUnion also asserts that many Canadians would struggle to adjust to even a one per cent increase in interest rates on their debts. So while things appear manageable right now, there is still potential for mass vulnerability to arise.
TransUnion forecasts that the average debt could eclipse $22,000 by the end of 2018. It’s important for all Canadians, even those who feel relatively secure with their finances, to prepare for emergencies.