Consumer debt hits record high in Canada

[albertGQ]

http://www.calgaryherald.com/touch/b...tml?id=7133043


CALGARY — The average consumer’s total debt in Canada reached an all-time high in the second quarter of this year, according to a report released Thursday by TransUnion.

It found that total debt, excluding mortgage, rose modestly in the quarter by $192 to $26,221.

“Although this continues the trend of inflationary growth seen in the past five quarters, (the second quarter) is still the highest debt level per person seen to-date. The nation has now experienced consecutive quarters of accelerated growth when comparing both quarter over quarter (0.74 per cent) and year over year (2.41 per cent) numbers, possibly marking yet another turning point in the directionality trend for consumer debt,” said the report.

The average consumer debt in Alberta was $33,564, up 1.2 per cent from the previous quarter but down 1.5 per cent from a year ago.

[Ironhorse]

Would that number include car loans?

[Bertuzzied]

Originally Posted by Ironhorse

Would that number include car loans?

yup

[DownhillGoat]

That number is a lot lower than I would have expected.

[chemgear]

Hmmm, still setting new records eh? I'm not 100% sure what they define as "average Canadian". Are they including everybody over 18 or just every Canadian? So an "average" family of 4 has four times that amount of debt?

Still interesting to see that Canadians keep piling on debt when even the Americans were smart enough to start reducing their loads after 2008.

[chemgear]

Originally Posted by fotze

I am still blown away with the amount of super nice/expensive cars on the road. Curious how that debt number breaks down. I.e car, credit card, etc.

http://newsroom-en.transunion.ca/eas...jsp=custom_144

[chemgear]

^ Further to that:

Q1 2012
Credit cards - $3,462
Lines of Credit - $34,107
Auto Loans - $18,212
Installment Loans (mostly mortgage I assume?) - $21,974

Not sure yet how they got to the $26,029 or even the $26,221 number. They're not including the Lines of Credit as many are secured? Anybody else see?

[opendoor]

Originally Posted by chemgear

^ Further to that:

Q1 2012
Credit cards - $3,462
Lines of Credit - $34,107
Auto Loans - $18,212
Installment Loans (mostly mortgage I assume?) - $21,974

Not sure yet how they got to the $26,029 or even the $26,221 number. They're not including the Lines of Credit as many are secured? Anybody else see?

I assume those averages are based only on the number of people that actually have them (i.e. of the x number of Canadians who have lines of credit, the average owes $34K).

[chemgear]

^ Maybe, not sure though - I can't seem to find clarity about it on their website. But really, the number excluding mortgage payments is more like $55,000 per adult. $110,000 per couple without kids at least - more depending upon how they count to their "average Canadian" total.

[opendoor]

Originally Posted by chemgear

^ Maybe, not sure though - I can't seem to find clarity about it on their website. But really, the number excluding mortgage payments is more like $55,000 per adult. $110,000 per couple without kids at least - more depending upon how they count to their "average Canadian" total.

I think it's pretty clear that it's based only on borrowers, so your numbers don't add up. Lots of people have lines of credit but no auto loans, or a car loan but not a line of credit and so on. I don't have a penny in consumer debt so I wouldn't be counted in their divided up figures, but I would be part of their overall debt figure which is presumably total consumer debt divided by whatever population they consider "consumers". That's why the "average consumer" debt level is much lower than the aggregate amount of the categorized debt. There are lots of people with no debt to speak of who drag down the total numbers.

You can just look at the rough numbers for yourself if you want a better idea. According to Bank of Canada numbers, non mortgage debt is about 40% of total personal debt in Canada. Given that total personal debt in Canada is around $1.6 trillion, that means consumer debt is at about $600 billion. There are about 26-27 million people over the age of 18 in Canada, so divided up per capita amongst adults, that's roughly $23K per person. Obviously those are really rough numbers, but they do demonstrate that the average consumer debt numbers that are reported are relatively accurate. There's no way the average adult in Canada has $55K in non mortgage debt.

[Erick Estrada]

Originally Posted by fotze

I am still blown away with the amount of super nice/expensive cars on the road. Curious how that debt number breaks down. I.e car, credit card, etc.

Lots of the luxury cars are leased. Most BMW's you see in the city are leased and it's why the 3 series is the new Civic in Calgary. Also a lot of people are getting into HELOC's to fund their toys. Calgarians wether they can afford it or not desperately try to keep up with the Joneses.

[TurnedTheCorner]

Originally Posted by Erick Estrada

Calgarians wether they can afford it or not desperately try to keep up with the Champions.

fyp

[photon]

Not to mention super low interest for super long terms. If someone's going to let me borrow the money for free to buy a car and pay for it over 7 years, who am I to say no?! I can take that money and do something else with it.