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Consumer debt to reach $29K per person

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Canadian consumer debt is expected to reach a record high of almost $29,000 per person in 2014, according to TransUnion.

The information and risk management company predicts consumer debt (excluding mortgages) will rise by 4.0 per cent in 2014. This means average debt will rise by more than $1,000 to an estimated $28,853 by the end of 2014.

Financial Recommendations

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The Burlington, Ont.,-based company released its first annual forecast for Canadian consumer credit on Thursday.

"In recent years, the increase in auto sales has helped propel the total debt number and we believe auto captive loans will once again be a driver of this increase in 2014," Thomas Higgins, vice president of analytics and decision services at TransUnion, said in a release.

While debt is expected to soar, the national credit delinquency rate is declining. That rate shows the ratio of borrowers who are 90 or more days late on payments for all of their credit products. TransUnion predicts the rate will drop from 1.76 per cent at the end of this year to 1.66 per cent by the end of 2014.

Following the 2008 recession, Higgins said he thinks this shows Canadians feel more confident incurring debt because low interest rates make it easier to pay off.

"Our interest rates are still very, very low, so that's allowed people to manage the debt level that they have, and required payments on the overall debt continue to go up and Canadians are still finding that they feel they can manage. So we're just about at the delinquency level that we were prior to the recession so in many respects we're coming back to where we started prior to the meltdown," Higgins said.

TransUnion reported many Canadians recognize they can't keep piling up debt, even when interest rates are low.

Nearly half of Canadians think they need to change their financial habits, according to a survey commissioned by the company.

TransUnion reports 46.7 per cent of Canadians plan to commit to at least one financial resolution in 2014. The most popular resolution was to put more money aside for savings.

A recent survey also found 37.3 per cent of Canadians missed their financial goals for 2013.

rachel.swatek@freepress.mb.ca

Republished from the Winnipeg Free Press print edition December 20, 2013 B7

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