Due to high inflation and rising borrowing costs, total Canadian consumer debt rose to $2.37 trillion in the fourth quarter of 2022, up 6.2%, according to financial analytics firm Equifax.
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In the fourth quarter of last year, the amount of nonmortgage debt increased by 5.4% compared to the same period of 2021, a more significant increase that included an above-average increase of 8.4% in people aged 27 to 42 regards.
Although mortgage debt accounts for three-fourths of all consumer debt, the financial stress is most evident among non-homeowners struggling with credit card debt.
In Quebec, the average debt is now $18,495, the second lowest debt in Canada behind Manitoba ($17,073), while the price goes to Alberta at $24,724 for the period under review.
According to the Equifax Canada report, the number of consumers actively using credit products (after opening at least one credit product) also increased by 3.2% in the final quarter of 2022.
“We’re seeing an increase in missed payments on credit cards and auto loans, particularly among low-income consumers,” said Rebecca Oakes, vice president of advanced analytics at Equifax Canada.
“Unfortunately, managing finances during a prolonged period of high inflation and rising cost of living is proving to be overkill for some people,” Ms Oakes said, anticipating a mortgage payment shock.