Canadians have fewer credit cards but rising balances: TransUnion

Canadians have fewer credit cards but rising balances

By Special to MoneySense on August 22, 2017
Estimated reading time: 2 minutes

75% of the country's population has some sort of credit

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[brightcove video_id=”6056482518001″ account_id=”6015698167001″ player_id=”lYro6suIR”] VANCOUVER (NEWS 1130) – More Canadians than ever have access to some form of credit, according to a new report from TransUnion. More than 27 million consumers have access to some type of credit, which is just under 75 per cent of the country’s population and also a record. “And we’ve seen it across most credit products, auto loans, mortgages, credit cards, although the demand for credit cards isn’t as strong. So more and more consumers are getting access to credit. Lenders are granting it because it’s a low-risk environment, low-interest-rate-environment,” says the credit bureau’s Matt Fabian.

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But our wallets are actually lighter because we’re carrying fewer credit cards, which might seem misleading at first glance. “The actual credit lines and balances for credit cards are rising. So consumers are still using their credit cards; they’re just not taking out two or three credit cards. They’re using one or two, but they’re using them as much or more than they ever have,” says Fabian. “Part of that could also be that a lot of credit card purchases are related now to more and more online and digital. So when you have an eWallet, you might lock your one credit card into that eWallet and that might be your primary credit card that you use.” He says banks are also “becoming a lot more aggressive with loyalty programs.”

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Average non-mortgage debt is up as well, by 2.7 per cent from this time last year, to $22,154, but that’s not necessarily a bad thing. “Consumers in Canada are essentially good at managing their debt and although the overall debt levels in Canada are increasing, delinquency rates — which is the number of days an account may be past-due — are dropping. So to us, it suggests that consumers in Canada are being responsible,” says Fabian. “So far, based on the delinquency levels we’ve seen, people are using it responsibly. So in our opinion right now, it’s a very healthy, functioning credit market in Canada.”