A report by TransUnion released this week, shows that Canadians are getting better at paying down their debts on time. The numbers show that a shrinking number of debt payments are overdue by 90 days or more; overall delinquency rates are at 2.58% (for non-mortgage debts), which is down from 2.69% last year.
However, the amount of debt Canadians hold is up, but just slightly. Average consumer debt rose just $148 on average from last year, sitting at about $21,028. Lines of credit, including credit cards and car loans, accounting for 35% of all non-mortgage consumer debt.
Experts say this new data proves that Canadians are increasingly aware of the importance of making debt payments on time, and that they actually have the capacity to do so.
“The recent interest rate cuts may have, in part, made it easier to manage lines of credit, which typically carry variable rates.” — Jason Wang, Trans Union
The Bank of Canada cut their key interest rate twice this year, to 0.75% in January and 0.50% in July. Commercial lenders followed this lead and dropped their variable rates as well.
A good reminder as well, your debt payments have an effect on your credit report. Be aware of your credit limits, and make sure you always make debt payments and make them on time. Little misses each month could add up to a big problem when it comes time to apply for a mortgage loan. For more information on credit and credit reports, see my blog post on the subject.
And as always, you can contact me with any questions you have regarding debt, payments and mortgages, or find me on Twitter.
