Young Canadians are the worst at paying back their debt on time: Equifax
Canadians 35 and under are the worst at paying back their debt on time, according to Equifax.
On Tuesday, the credit bureau company revealed just how much people of all ages are in debt across the country in its latest consumer credit trends report.
It found that total consumer debt spiked to a whopping $2.36 trillion, up 7.3% from last year as credit card spending rises.
Over the last quarter, almost 1.5M new credit cards were issued, an increase of 22.5% from Q3 2021 and up 6.2% from the pre-pandemic period of Q3 2019. #CreditCard spending is at an all-time high when compared to the same period in previous years. #ConsumerDebt
— Equifax Canada (@equifaxcanada) December 6, 2022
“Factors including population growth from immigration combined with pent-up demand from the pandemic on things like vacations will be contributing to the overall rise in credit active individuals,” explained Rebecca Oakes, vice-president of advanced analytics at Equifax Canada, in a statement.
Since July, almost 1.5 million new credit cards were issued, an increase of 22.5% from last year, and up 6.2% from the pre-pandemic 2019, reported the company.
With credit card spending at an all-time high, the average debt per Canadian also rose to $21,183, at its highest since 2020.
While Canadians ages 18 to 25 and 26 to 35 have some of the lowest amounts of debt ($8,051 and $17,269, respectively), Equifax found that they have the highest delinquency rates at 32.64% and 10.67%.
Equifax Canada
The delinquency rate refers to the amount of debt that’s past its due date. In other words, while young Canadians may not be tapping their credit cards as much, they’re having a hard time paying back their bills on time.
The age group with the highest average debt is those from 46 to 55 at $32,433, with the lowest delinquency rate of 2.7%.
Oakes says there are many reasons why overall debt has risen.
“This is a story of two sides though, as consumers also tend to rely on credit more during tough times,” she added.
“Part of the new credit uptake we’re seeing is likely from people who are feeling financial stress from sustained increased living costs and are taking on more debt as a result.”
The cost of living is certainly rising and can be seen in recent reports showing how much more expensive grocery bills will be next year.
The report also broke down average debt by city and province. Alberta has the highest average debt per person among provinces with its city Fort McMurray having the highest debt per person among cities in Canada.
Equifax Canada
Equifax Canada
On the other hand, Equifax found that the pace of mortgage debt has slowed due to reduced home sales and the fall in new mortgage volume.
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