It will be interesting to see what happens to the wave of U.S. debt settlement companies that ran north of the border in the last year or so trying to capture Canadians in advanced fee debt settlement programs.
It seems Canadians are slowing demand for new credit, the Equifax Canada reports.
The growth in Canadian non-mortgage debt in the 12 months ending June 2012 was 30 per cent lower than the growth witnessed a year earlier.
The report stated credit card balances continued to decrease, while other credit products such as bank loans and lines of credit showed very moderate growth compared to the same period last year.
Total consumer non-mortgage indebtedness in Q2 2012 increased by 3.1 per cent in the last 12 months, compared to a growth of 4.4 per cent in the same period last year.
“It is very encouraging to see non-mortgage consumer indebtedness increase at a very moderate rate with most of the growth coming from people’s existing credit facilities, as opposed to opening new accounts,” says Nadim Abdo, Vice President, Consulting and Analytical Services, Equifax Canada. “We are also seeing a continued decrease in serious consumer delinquency and bankruptcy.”
The credit product which showed the largest increase in outstanding balances was Non-Bank Auto Finance loans and leases, which grew by 8 per cent over the same period last year.
“According to our Credit Seeking Index, which measures the velocity at which consumers are seeking new credit facilities, consumer demand for new credit is now 6 per cent lower than it was prior to the recent financial crisis in 2008, with most of the growth being attributed to Non-Bank Auto Finance loans and leases,” notes Abdo.
Default and delinquency rates continue to drop back to pre-crisis levels as well.Canadians Turning Away From Debt. Debt Growth Down 30 Percent. by Steve Rhode