Equifax Canada Cautions Consumers on $1.5 Trillion Debt and Growing
TORONTO, ONTARIO--(Marketwired - March 3, 2015) - Even as current economic conditions shift, consumer appetite for new credit continues to increase and total consumer debt (including mortgages) now stands at $1.529 trillion in debt, according to Equifax Canada's Q4 2014 National Consumer Credit Trends Report.
Comparatively, consumer debt (including mortgages) was $1.513 trillion in Q3 2014 and $1.42 trillion a year earlier: an increase of 1.1 per cent and 7.7 per cent mainly driven by installment and auto loans.
When compared to the same quarter last year national consumer demand for credit was driven mainly by credit cards. Bank and auto inquiries also increased compared to the same quarter last year.
"It's a cautionary tale what we are currently seeing in the Canadian economy," explained Regina Malina, senior director of decision insights at Equifax Canada. "The rapid decline in oil prices caught many by surprise. And, that's the point - consumers and business owners need to be more vigilant. When economic change happens, it can happen very quickly and can challenge previously observed stability of key economic and credit indicators."
The average debt held by Canadians, excluding mortgages, has increased by 2.9 per cent to $20,967. Another concern is the latest debt-to-income ratio figure from Statistics Canada, which is at an all-time high level of 163%.
Meanwhile, in spite of the growing concerns about consumer debt, the national 90+ delinquency rate in all regions and major cities has remained the same or decreased in most cases. In Q4 2014, the national 90+ delinquency rate reached 1.09%, the lowest level since 2008.
"Overall, delinquency and bankruptcy rates have been stable or decreasing over the last three years," advised Malina. "These are some of the economic indicators that we'll continue to watch closely over the remainder of this year. "
The demand for credit remains strongest in the West, while there is noticeable activity in other regions as well.
REGIONAL DEMAND FOR NEW CREDIT
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Data for this report, including scores, are sourced from the Equifax Canada data warehouse, which stores the majority of credit transactions that occur in Canada. There are over 25 million unique consumer 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.
Equifax is a global leader in consumer, commercial and workforce information solutions that provides businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide. The company's significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enables it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 19 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2014, Equifax was nominated as a Bloomberg BusinessWeek Top 50 company; its CIO was listed as one of the top 100 by CIO magazine; and the company was named to the Fintech 100 list, was recognized as a top 20 company to work for by the Atlanta Journal-Constitution, and was named a 2014 InformationWeek Elite 100 Winner. For more information, please visit www.equifax.com.
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