Americans know all about consumer debt – sometimes it seems like we almost invented it.
But the fact is our neighbors to the north may be even more in debt than we are.
According to a recent study conducted by credit reporting agency TransUnion, Canadians owed C$27,368 in non-mortgage debt at the end of 2013. That amount is down only slightly from the all-time record debt level of C$27,485 reached in 2012.
The Canadian consumer debt level as a percentage of household income is now nearly 164 percent. This can be compared to a debt level of just more than 140 percent for American households.
TransUnion is further predicting the Canadian debt level will rise to an all-time high by the end of 2014 to C$28,853. Keep in mind this does not include mortgage debt.
“As recently as 2008, American
debt was near 168 percent.”
American households were impacted by the financial crisis far more than Canadians were. As a result, most American consumers curtailed their spending over the past few years. The average Canadian consumer appears not to have done the same.
As recently as 2008, American debt was near 168 percent – almost where the Canadian debt level is at the moment. This has led some analysts to predict a similar wave of debt default to what the U.S. experienced beginning in 2009.
It should be pointed out the average Canadian household income is higher than in the U.S., making their debt servicing a little easier. Still, it is a trend to watch closely, no matter which side of the border you live on.
Source: thechronicleherald.ca. Photo source: stackthechips.com