Credit card debt is on the rise among Canadians, according to a new report by credit agency TransUnion.
A 4% increase was observed year-over-year in the final quarter of 2015. That means credit card debt is at a three year high, according to TransUnion, at an average debt load of $3,610. While it’s not unusual to observe increased credit card debt after the holidays, Jason Wang with TransUnion says the amount of debt was surprising.
“What caught our attention was that, compared to 2014, consumers used their credit cards much more during the 2015 holiday season,” said Wang. “Our forecast model predicts that average credit card balances will remain around $3,800 for the rest of 2016, and we don’t expect consumers to significantly reduce their card debt in the near future. As always, we encourage consumers to spend within their means.”
Beyond credit card debt, there’s also been a spike in delinquencies on car loan payments of 10% in the past year. Car loan delinquencies are up to 1.32%, a four year high, largely driven by increases in Alberta and Saskatchewan due to the oil slump.
Wang believes it’s mostly a regional issue.
“Falling oil prices have led to rising unemployment rates in oil-rich regions. We are now seeing the increase in unemployment in these areas manifest as rising delinquencies across the board, though the greatest impact has been on auto loans,” he said.
Average total household debt levels saw a slight year-over-year uptick in the last quarter of 2015 from $21,428 to $21,512 as well.