Canadians are making a lot of purchases on borrowed money — and sooner or later, they’re going to have to pay up.
Equifax Canada, a credit rating agency, has released a new survey which suggested canada’s consumer debt has risen to $1.422 trillion — an increase of nine per cent over last year. 4.5 per cent of that increase was between the third and fourth quarters alone.
Credit card debt alone accounts for $81.6 billion, up six per cent over the previous fiscal year.
While it’s unsurprising to see the leap in the final quarter of any given year — that is when many are making their holiday purchases or buying winter vacations on credit cards — the overall increase year-over-year could be cause for concern.
According to Regina Malina, the firm’s director of modelling and analytics, “monthly payments are being made … (and) consumers and lenders continue to be responsible in how they’re using credit.”
The report also shows that delinquency rate — in other words, debts that have been left unpaid for 90 days or more — were at 1.12 per cent nationally, down .07 per cent over the previous year.
However, there is a big difference between making monthly payments and paying down debt — and with debt apparently on the rise, and not decline, people may just be treading water or paying off the interest.
Though the sky is not yet falling, it’s important that Canadians balance their spending so that they can pay down their debts.
It’s bad enough to be broke. Being broke and in debt is worse. And it sucks for the economy, too.
All Times-Herald editorials are written by its editorial staff.