Albertans are struggling to pay off their debt amid the oil patch crisis – and many more are defaulting on their loans than normal – according to a new report by TransUnion.
In its latest Canada Industry Insights Report, the credit monitoring company examined almost every active credit file in its national database.
Looking at this quarter, TransUnion found the largest non-mortgage loan delinquency rate increases was in provinces most impacted by the oil slump—Alberta and Saskatchewan.
In Alberta, the number of people defaulting on their loans for more than 90 was up a massive 11.92% – that indicates a rise from 2.5% of borrowers last year to 2.8% this year.
Meanwhile, the average Calgarian seems to be struggling to pay off their debts, now owing $28,125 outside of mortgage debt, down only 1.06% from this time last year.
The rest of Alberta is faring only slightly better, with debt levels down by only 1.16% to $27,479.
Subprime borrowers in more debt
Overall, the report found, Canadians’ non-mortgage debt levels are up almost 3% this year, worryingly driven by subprime borrowers – those with credit scores of 599 or lower.
For those borrowers – the same kind which brought the U.S. economy to its knees in 2008 – average credit card debt alone increased year-on-year by a huge 5.7% to $6,601.
By comparison, year-on-year credit card borrowing by prime consumers – those with a good credit score of 700 to 779 – was down 4.7% to $5,847.
Nevertheless, it seems overall Canadian credit card delinquency rates rose by a massive 14.08% in the first quarter compared to the same time last year, to 2.06%.
But never fear, TransUnion says those are actually “normal” levels, last seen in 2014.