It’s bad enough Canadians continue to pile on consumer debt, but the kind of debt is astounding.
According to credit rating agency, TransUnion, the average non-mortgage consumer debt load is $21,912 – up 2.2 per cent from last year. That includes financing for consumer items like furniture or vehicles.
A woman at my workplace got a nice SUV on credit a few years ago. Her monthly bill for operating that beast was $1,800. She spent more on gas in one month than I did on my transportation in one year.
Also, this is similar to how phone companies offer their services. In effect, it's credit. I know of many people who get a new phone "on a plan". Had they bought the phone up front, they could have saved 10% or more over a two year period.
TransUnion says the average balance owing on credit cards is $4,094 – up 2.3 per cent from last year. At 18 per cent, interest on that amount - compounded annually - will more than double in five years to $9,366.
No wonder the credit card companies and the Canadian banks are raking in record profits.