Record High Canadian Debt Levels
In the last quarter of 2012, Canadian’s debt loads rose to their highest levels in 8 years according to TransUnion (which is when they started tracking it). The average consumer’s total debt load, excluding mortgages, rose to $27,485.00.
The Bank of Canada Governor Mark Carney and other policy makers have been warning consumers that these record high household debt loads put both themselves and the economy at risk. Any increase in the interest rate in Canada which is currently very low could tip households over the edge.
Household credit market debt to disposable income hit a record high of 164.6 percent. That means Canadian families now owe nearly $1.65, on average, for every dollar of after-tax income they earn.
The interesting flip side of the report shows that more Canadians are paying their bills on time. However, Nova Scotia is consistently among the top three provinces for its delinquency rates (3rd for lines of credit, 2nd for installment loans and 3rd for auto loans).
Is paying down debt a priority for you? Or is saving more of a priority? Or, perhaps, a balanced approach between the two.
What is the answer to stopping this increase in consumer debt load? Should it be up the consumers to reduce or halt spending? Or perhaps the lenders need to be more diligent in their credit granting so that this situation does not continue? Maybe, minimum payments need to increase on credit cards and lines of credit so that people actually make head way.
I would love to hear peoples’ opinions.