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TransUnion: Total Debt per Canadian Consumer Increased More Than $1,000 in Last Year

Line of Credit and Credit Card Debt Decreased in 1Q

Thomas Higgins, TransUnion's vice president of analytics and decisioning
Total Debt (Excluding Mortgage) for Canada

TORONTO--(Marketwire - Jun 1, 2011) - TransUnion's quarterly analysis of Canadian credit trends found that total debt per consumer (excluding mortgage) for the nation increased 4.5 percent in the last year (1Q11: $25,597 from 1Q10: $24,497). The report is part of a series of quarterly consumer lending sector analyses focusing on trends in the credit card and automotive lending industry. Leveraging TransUnion's credit database, the information for this analysis is culled quarterly from anonymous credit files of all credit-active Canadian consumers, providing an in-depth perspective on how they are managing their credit health.

1Q 2011 - Overall Debt/Credit Card Statistics

  • Total debt per consumer (excluding mortgage) has increased in all Canadian provinces on a year-over-year basis.
    • Quebec and Newfoundland & Labrador experienced the greatest increase in the country, with total debt per consumer rising 7.8 percent year over year in both provinces. Quebec's total debt per consumer stood at $18,025 for the quarter. Newfoundland's was $23,372.
    • The smallest increases occurred in British Columbia (0.9 percent), increasing to $36,649 and New Brunswick (3.4 percent) moving to $21,932.
    • On a quarterly basis -- and in line with seasonal patterns -- total debt declined more than $100 from the fourth quarter of 2010 ($25,709).
  • The total active credit population in Canada as of the first quarter of 2011 was 25.12 million consumers, up from 24.72 million consumers from a year ago.
  • Canadian average credit card borrower debt (defined as the aggregate balance on all credit cards for an individual bankcard borrower) declined 4 percent quarter over quarter and marked the second consecutive quarterly decline.
  • Credit card debt stood at $3,539 (1Q11). At the end of last year it was $3,688. Year over year, credit card debt per consumer has declined $25 (1Q10: $3,564).
  • The national credit card delinquency rate (the ratio of credit card accounts 90 days or more delinquent) increased to 0.38 percent in the first quarter of 2011, up 5 percent over the previous quarter (0.36 percent). Year over year, credit card delinquencies increased more than 11 percent (0.34 percent 1Q10).
    • Prince Edward Island had the highest credit card delinquency rate at 0.68 percent while Quebec had the lowest (0.26 percent).

Analysis
"Our first quarter data shows a continued increase in the total debt per consumer, although the trend still remains modest compared to the double digit, pre-recession levels. The post-Christmas seasonal pattern remained intact, with a quarterly drop in credit card balances per consumer and a slight increase in delinquency rates compared to the fourth quarter of 2010. All in all, the first quarter was typically Canadian, with minor shifts in spending, continued fiscal management of delinquencies and modest confidence increases supporting continued spending increases."
Thomas Higgins, TransUnion's vice president of analytics and decisioning

1Q2011 - Lines of Credit Statistics

  • Lines of Credit (LOC) are the largest category of consumer debt in Canada (excluding mortgages) accounting for more than 41 percent of the outstanding debt in Canada at the end of the first quarter. Alberta and Ontario residents are proportionately the largest users of LOC, accounting for over 57 percent of it.
  • The LOC delinquency rate (the ratio of LOC accounts 90 days or more delinquent) is the lowest of any product category at 0.21 percent. Accounts 90-120 days past due are down 10.0 percent versus last year.
    • The Northwest Territories and Nunavut have the highest LOC delinquency rates, exceeding 0.50 percent. Quebec (0.13 percent) and Newfoundland & Labrador (0.14 percent) have the lowest rates in the nation.
  • Canadian LOC borrower debt (defined as the aggregate balance on all LOC for an individual LOC borrower) declined for the first time in five quarters to $33,762 from the previous quarter's $33,981. However, on a year-over-year basis, LOC debt was up 5.9 percent (1Q10: $31,867).

Analysis
"Lines of Credit continue to be the main financing vehicle for Canadians accounting for over half of all non-mortgage debt. Although LOC debt increased from the previous year, the first quarterly drop in several years combined with continued increases in installment debt may be an early sign that Canadians are shifting to a more conservative and restrictive form of financing to manage their debt loads."
Thomas Higgins, TransUnion's vice president of analytics and decisioning

1Q2011 Auto Statistics

  • The auto delinquency rate (the ratio of auto accounts 90 days or more delinquent) declined slightly to 0.10 percent in the first quarter of 2011 versus the previous quarter 4Q10: 0.11). A year ago it stood at 0.13 percent.
    • Manitoba and Nunavut have the highest auto delinquency rates in Canada at 0.39 percent. Newfoundland and Labrador (0.07 percent) and Quebec (0.06 percent) have the lowest rates in the nation.
  • Canadian auto borrower debt (defined as the aggregate balance on all auto loans for an individual auto borrower) held steady at $16,181 from the previous quarter's $16,189. It is up, however, 12.4 percent compared to the first quarter of 2010 ($14,402). Total auto debt for the nation declined slightly from $45.8 billion (4Q10) to $45.6 billion (1Q11). Total auto debt in the first quarter of 2010 was $46.8 billion.

Analysis
"The modest growth rate in auto financing debt is balanced by increases in installment debt where the major banks have continued to enter the direct auto financing market, offering additional choices for consumers. Positive declines in delinquency rates continue to bode well for Canadians managing their current debt loads."
Thomas Higgins, TransUnion's vice president of analytics and decisioning

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. 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 credit and information 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 comprehensive data and advanced analytics and decisioning. 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 Toronto, with global headquarters located in Chicago, Illinois, TransUnion provides service and support throughout Canada. Visit www.transunion.ca to learn more.

Graphics and/or photographs to accompany this release can be obtained by members of the media by contacting Cliff O'Neal at 312-985-2540 or coneal@transunion.com or Dave Blumberg at 312-985-3059 or dblumbe@transunion.com.

Contact
Dave Blumberg
TransUnion
E-mail Email Contact
Telephone 1 312 985 3059 / 312 972 6646

Media Contacts

Consumer, Corporate and International

Clifton O'Neal
coneal@transunion.com

Credit Statistics, B2B and International

Dave Blumberg
 

 
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