SOURCE: TransUnion

TransUnion

November 14, 2012 06:00 ET

TransUnion: Personal Debt Levels Balloon to Highest Levels Ever

Debt Levels Growing at Fastest Rate Since 2010

TORONTO--(Marketwire - Nov 14, 2012) - TransUnion's quarterly analysis of Canadian credit trends found that the average consumer's total debt (excluding mortgage) increased at its greatest rate in nearly two years, jumping 4.6% in Q3 2012 to $26,768. The nation experienced both its largest quarterly (2.1%) and annual (4.6%) growth since Q4 2010.

In the last five years between Q3 2007 and Q3 2012, inflation as measured by the Consumer Price Index has risen 9%, yet total consumer debt (excluding mortgage) has jumped more than 37%.* 

"At this time last year, we were encouraged to see consumer total debt levels remain relatively stagnant for three consecutive quarters," said Thomas Higgins, TransUnion's vice president of analytics and decision services. "One year later, it appears we have reversed course as consumer total debt has increased for three straight quarters, including the largest jump in nearly two years this past quarter. While delinquency levels remain about the same or lower than they were one year ago, it should be noted that in the past five years debt levels have now increased 400% more than the rate of inflation."

The increase in average debt was consistent throughout Canada. On a year-over-year basis, the largest increases were found in New Brunswick (9.49%), Prince Edward Island (8.25%) and Newfoundland and Labrador (7.83%).

                             
Avg Consumer Debt   Q3
2011
  Q4
2011
  Q1
2012
  Q2
2012
  Q3
2012
  Q/Q
Chg
  Y/Y
Chg
British Columbia   $36,588   $37,276   $37,433   $37,879   $38,837   2.5%   6.2%
Alberta   $33,182   $33,613   $33,515   $33,564   $33,688   0.4%   1.5%
Ontario   $24,540   $25,135   $25,235   $25,447   $25,937   1.9%   5.7%
Quebec   $18,751   $18,376   $18,475   $18,580   $19,174   3.2%   2.3%
                             

Consumer Debt - Quarterly/Yearly
Despite year-over-year growth on total consumer debt, directional changes in debt levels varied for several credit instruments.

  • Canadian average credit card borrower debt (defined as the aggregate balance on all credit cards for an individual bankcard borrower) declined 1.04% year over year, but increased 0.48% on a quarter-over-quarter basis.
  • Canadian lines of credit (LOC) borrower debt (defined as the aggregate balance on all LOC for an individual LOC borrower) decreased 0.21% year over year, with an increase of 0.98% quarter over quarter.
  • Canadian installment loan borrower debt (defined as the aggregate balance on all installment loans for an individual installment loan borrower) increased 2.28% year over year and 1.58% quarter over quarter.
  • Canadian auto borrower debt (defined as the aggregate balance on all auto captive loans for an individual auto captive borrower) increased more than 11.25% year over year and 1.84% quarter over quarter.
                             
    Q1
2011
  Q2
2011
  Q3
2011
  Q4
2011
  Q1
2012
  Q2
2012
  Q3
2012
Credit Cards   $3,539   $3,590   $3,611   $3,633   $3,462   $3,556   $3,573
Lines of Credit   $33,762   $33,855   $34,122   $34,340   $34,107   $33,721   $34,050
Installment Loans   $22,431   $22,281   $22,340   $21,764   $21,974   $22,493   $22,849
Auto Captives   $16,181   $16,671   $17,283   $17,759   $18,212   $18,881   $19,228
                             

Consumer Delinquencies - Quarterly/Yearly

Delinquency levels continue to remain low across all major product categories.

"Despite increased debt levels, Canadian consumers have done well to maintain relatively low delinquency rates," said Higgins. "It should be noted that many consumers are taking advantage of the low interest rate environment. Just five years ago, interest rates were significantly higher than they are today."

                             
    Q3
2011
  Q4
2011
  Q1
2012
  Q2
2012
  Q3
2012
  Q/Q
Chg
  Y/Y
Chg
Credit Cards   0.32%   0.31%   0.32%   0.29%   0.30%   1.45%   -6.99%
Lines of Credit   0.20%   0.21%   0.20%   0.19%   0.19%   0.10%   -7.21%
Installment Loans   1.32%   1.27%   1.24%   1.24%   1.22%   -1.36%   -7.22%
Auto Captives   0.11%   0.10%   0.09%   0.08%   0.10%   13.79%   -14.48%
                             

Three Highest Delinquency Provinces

             
Credit Cards   Lines of Credit   Installment Loans   Auto Captives
PEI 0.52%   BC 0.26%   ON 1.95%   MB 0.25%
NB 0.46%   AB 0.21%   NS 1.60%   NB 0.21%
NS 0.45%   MB/NS/PEI 0.18%   PEI 1.59%   NS 0.19%
             

Three Lowest Delinquency Provinces

             
Credit Cards   Lines of Credit   Installment Loans   Auto Captives
QC 0.20%   NL 0.12%   QC 0.44%   BC 0.06%
SK 0.26%   QC 0.12%   NL 0.99%   QC 0.06%
AB/BC 0.29%   SK 0.15%   SK 1.07%   NL 0.07%
             

*Information collected from Bank of Canada "Rates & Statistics" website (http://www.bankofcanada.ca/rates) and TransUnion database

TransUnion's Market Trends
TransUnion's Market Trends is an in-depth, full sample solution that provides statistical information every quarter from TransUnion's national consumer credit database, culled from anonymous credit files. Each Canadian consumer record contains hundreds of credit variables that illustrate consumer credit usage and performance. By leveraging Market Trends, customers from a variety of industries can analyze industry trends over an entire business cycle, helping to understand consumer behaviour in different geographic locations throughout Canada. 

About TransUnion
As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Based in Burlington, Ontario, with global headquarters located in Chicago, Illinois, TransUnion provides local service and support throughout Canada. Visit www.transunion.ca to learn more.

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