Rising Consumer Debt

I really like new cars. I kept on trading and trading…and I was buying a lot of gifts for people and getting more and more into debt,” says D’Arcy George who lives in Lethbridge, Alberta. Eventually his spending habits caught up to him and D’Arcy was up to $70,000 in debt and struggled with a bank account constantly in overdraft. But D’Arcy’s experience is not unique.

In a province where the average wage is over $28/hour, a sustained period of low interest rates has caused consumers to become overconfident in the economy which has led to rising consumer debt. But now that oil and gas prices have slumped some people are forced to re-examine their financial situations. 😕

D’Arcy has realized this reality and has taken dramatic steps to get his debt under control. He started a second job at Costco to make more money. He now works every day of the week, often more than 12 hours a day, and he drives a used car. “I feel more confident that I can save money and know how to handle it,” he says. “I always have a balance of $8,000 in the bank and I get worried if I have less.

Canadians are getting the message when it comes to our consumer debt. A recent report from TransUnion shows the average Canadian individual owed $21,428 non-mortgage debt by the end of 2014. This number includes credit cards, lines of credit, student loans, and other types of credit products but does not include mortgages, home equity lines of credits, or margin loans.


$21,428 is up 2.3% compared to the previous year. However digging deeper into the number we see that Lines of Credits, which make up 40% of consumer debt, has increased by 4.4%, while credit card debt has actually fallen by 2%. In other words consumers are getting smarter about where they’re borrowing money from. People are familiarizing themselves with how credit works and are making better decisions about their spending habits overall. 🙂

It’s important to save in good times because the fickle economy can change on a whim. Sometimes it may seem that everyone else around us already owns a home, has an expensive phone plan, and takes tropical vacations every year. But a generation ago consumers lived in smaller houses, prepared almost all their meals at home, travelling out of the country was a pretty big deal, and only rich people had a dishwasher or a second TV. Consumers had to save for their own retirements and medical emergencies because the CPP and universal health care wasn’t available across the country yet.


We have so much now compared to before. If our parents could do it back in their generation, then using our abundance in resources, technology, infrastructure, and services today, surely we can all find ways to make meaningful strides with our finances. 🙂

Random Useless Fact:

The Prime Minister of Singapore has the highest salary among major world leaders


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03/22/2015 12:20 pm

Oh haha I guess world leaders aren’t working for the money. They probably wished they get some kinda stock options or something.


03/23/2015 4:11 am

By the crdit stats mentioned i guess I am an exception. I have a >$131K LOC that I use for investment purposes. All interest is deductible as it is for investment purposes. The dividends pay the monthly interest charges as well as lower the principal – every month.
So not all debt is bad debt. If interest rates change then I will review the portfolio.

As to D’Arcy, I can only speculate that he did not look at his bank account very often. Good thing he woke up and smartened up. Kudos to him for taking things in hand and getting finacially responsible. He will probably end up in a postion where he can do the things he wants without being in debt.
Now if only our governments would understand this.

As to the world leader’s salaries, it is a god thing we don’t pay them too much for all the trouble they have gotten the world in to. I still don’t see how the bankers get paid millions per year and with all their wisdom and education still managed to just about wreck the financial system in 2008


Paul N
Paul N
03/23/2015 6:46 am
Reply to  RICARDO

I agree on your first few points. Maybe people learn from our governments on how to create a massive debt that can never be paid back and not seem to worry about it. If they can do it then why not do the same on an individual basis. Hey it has to be good right? As for the “greedy bankers”? Maybe if the government didn’t set the table for them to be greedy and banks weren’t also forced to give out loans to people who should never have had one. Even forced to open non profitable banks in areas where they would never dream of opening one or be “bullied” into submission. I’m kind of tired of everyone only picking on the bad bankers. There is a lot worse then that out there, it’s just no one really want’s to dig a little deeper and see all the culprits out there. I believe the true story of our “great depression” goes a lot deeper than BOA and Goldman Sachs etc. acting badly. By the way, has anyone ever asked where the money goes when banks are fined? Also has any banker done any jail time? Do you think one would… Read more »

Weekend rea | Well Rounded Investor
03/23/2015 11:49 am

[…] wrote about Rising consumer debt in Canada, but my guess for American it is also on the […]

03/23/2015 5:43 pm

I don’t have consumer debts. But like you, I’m highly leveraged in real estate. I bought my property in the college area, so I’m always able to fill it, regardless how the housing market goes. I’ll make less if the housing market pick up, and the rent market cool down.

The generation gap cartoon show the waste line correlate to the amount of money, the higher the waste line, the more money the man have. 🙂 back in the ’80, $20k you can buy a house in San Francisco. Now you have to cough up $1.2 mil to buy far from the metro, and blog about it, how “good” of a deal you got. 🙂

Mark Yenter
Mark Yenter
03/23/2015 9:24 pm

No doubt that the allure of shiny new things is making people borrow like crazy to get what they want. If only more would embrace the so called “good-debt” using it as leverage money to grow a shiny new business they can call their own. LOL on the generation gap-photo, although I think pants falling down is more of a fashion statement among young people nowadays.

03/25/2015 10:23 am

My mom would often comment about my generation, how many of us are only about enjoyment, going out to restaurants and going on vacations all the time. She is somewhat right. I feel everyone around me has bigger houses, fancier cars, goes on vacation every year. It makes me wonder just how much is in their bank account. Our generation is impatient, get tempted way too easily and all about showing off. Although there are a bunch of us who do break the stereotype. 🙂