Delinquency rates (90+ days) in Canada for credit cards inched up slightly in the second quarter. However, overall delinquency among all loans declined by more than 4%.
According to TransUnion’s MarketTrends report, delinquency rates declined to 2.58% in Q2 2015, a 7% drop over the course of the last two years.
Both installment loans and lines of credit played instrumental roles in pushing the overall delinquency rate down consistently since Q2 2013. Installment loan delinquency rates have decreased from 3.92% in Q2 2013 to 3.65% in Q2 2014, and then to 3.12% in Q2 2015.
Delinquency rates of lines of credit, the most popular non-mortgage credit product, have dropped from 0.90% in Q2 2013 to 0.81% in Q2 2014 before settling in at 0.74% at the end of Q2 2015. Lines of credit constitute 35% of all non-mortgage debt.
Another indication that Canadians are performing well on their credit products is through improving payment patterns. TransUnion developed a key indicator of consumer credit health utilizing its CreditVision advanced data solution, which provides additional insights into the health of the Canadian credit market.
The percent of Canadian consumers who pay two times the minimum due on a credit card or less has declined from 11.8% in Q2 2014 to 11.1% in Q2 2015. Declines were observed in all major provinces, including Alberta.
Debt levels for Canadians rose slightly in Q2 2015 compared to a year earlier, according to TransUnion’s report. Average balances per consumer (excluding mortgages) increased 0.71% from $20,880 in Q2 2014 to $21,028 in Q2 2015.
While major cities such as Toronto and Ottawa experienced the largest yearly increases, Albertans continued deleveraging trends, showing signs of the oil plunge impact. Both Calgary and Edmonton were the only major markets to experience yearly balance decreases.
For data, background and forecasts on Delinquency: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
Additional database resources include CardWeb.com’s CardExecs® – comings & goings of payments movers & shakers; CardWeb.com’s CardWatch® – ears & eyes on marketing globally (57K items); and CardWeb.com’s CardPixes® – form & function of card design (7K items).