Non-mortgage loans: More and more consumers are missing payments

Delinquencies from consumers rose for all non-mortgage loans, especially auto loans, while credit card spending rose 21.8%.

• Also read: Mortgages: thousands of people on the brink

“The financial crisis is visible. Delinquencies in the auto loan industry are rapidly approaching pre-pandemic levels and are showing higher-than-expected delinquency levels after six months,” said Rebecca Oakes, vice-president, advanced analytics at Equifax Canada.

Overall, insolvencies remain below pre-pandemic levels, but consumer proposals are growing rapidly and approaching 2018 and 2019 levels, Equifax notes in its latest quarterly credit market trends report.

The biggest increase in delinquency levels in the third quarter of 2022 is seen among younger consumers (35 and under), who had also seen the biggest drop in arrears at the peak 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.

The average non-mortgage debt per consumer is 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% compared to the third quarter of 2021 and 1.4% compared to the third quarter . quarter 2019.

popular credit cards

Average monthly credit card spending rose to nearly $2,447 in the third quarter, a jump of 17.3% from the same quarter last year and 21.8% from the pre-pandemic period (third quarter of 2019).

As for credit card balances, they are approaching pre-pandemic levels with a 13.8% increase in the third quarter of 2022.

“Demand for credit cards has risen sharply after being weak for more than a year. New card growth was seen across all consumer segments, including high-risk segments, adds Rebecca Oakes. Consumers have been making good payments, but we are starting to see a change in their behavior – particularly for borrowers who are not paying their balance in full.”

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