Consumer delinquencies rose on all non-mortgage loans, especially auto loans, while credit card spending rose 21.8%.
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“The financial crisis is visible. Delinquencies in the auto loan industry are rapidly approaching pre-pandemic levels and showing higher than expected delinquency levels after six months,” said Rebecca Oakes, vice president, advanced analytics at Equifax Canada.
Overall, delinquencies remain below pre-pandemic levels, but consumer propositions are growing rapidly and approaching 2018 and 2019 levels, Equifax noted in its latest quarterly report on credit market trends.
The largest increase in delinquency levels in the third quarter of 2022 was seen among the youngest consumers (up to 35 years old), who also experienced the largest decline in payment arrears at the height of the pandemic
Rising debt
In the third quarter of 2022, total consumer debt rose to $2.36 trillion, up 7.3% from a year ago.
Average non-mortgage debt per consumer stands at $21,183, the highest level since the second quarter of 2020. It surpassed pre-pandemic levels and now stands at $599.9 billion, up 5.3% from the third quarter of 2021 and by 1.4% compared to the third quarter of 2019.
popular credit cards
Average monthly credit card spending rose to nearly $2,447 in the third quarter, up 17.3% from the year-ago quarter and 21.8% from the pre-pandemic period (Q3 2019).
As for credit card balances, they are approaching pre-pandemic levels, up 13.8% in the third quarter of 2022.
“Demand for credit cards has soared after being weak for more than a year. Growth in new cards has been seen across all consumer segments, including high-risk segments, adds Rebecca Oakes. Consumers have made good payments, but we’re starting to see a change in their behaviors, especially for borrowers who don’t pay off their balances in full.”
