Canadians taking steps to avoid credit card debt, despite economic pressure
BURLINGTON, Ont. -- TransUnion Canada says data show Canadians have not taken on additional credit card debt during the COVID-19 pandemic.
The credit reporting agency says in a quarterly report that credit card balances fell 12.3 per cent in the second quarter compared with the same period a year ago.
TransUnion's Matt Fabian says reduced opportunities for spending during the lockdown may have contributed to the drop, but he also noted that people are opting to dip into savings or retirement funds rather than relying on credit cards.
Applications for new credit also grew at a slower-than-usual pace, amid reduced access to branches during the lockdown, uncertainty around employment and a pullback on new offers from lenders.
But TransUnion says mortgage debt is on the rise, with new mortgages, renewals and refinances up 29 per cent from a year ago and a 5.3 per cent annual increase in the total volume of mortgage debt.
Despite a 4.3 per cent rise in total outstanding debt in Canada, which stood at $1.9 trillion in the second quarter, Fabian says delinquencies have risen less than expected, as about 2.6 million Canadians, or 9.2 per cent of credit consumers, have at least one active deferral.
TransUnion uses the credit bureaus' national consumer credit database as source material for its quarterly report.
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