Q2 2023 Credit Industry Insights Report

Canadian Consumers Turn to Credit for Liquidity


The Q2 2023 Credit Industry Insights Report (CIIR) revealed a consistent rise in credit demand among Canadian consumers who are seeking additional financial flexibility due to the high cost of living, despite a slowdown in inflation.

TransUnion’s Credit Industry Indicator (CII), which maps consumer credit market health, reached 106 in June 2023, up 1.6 points compared to the same period in 2022.


90+ Day Delinquency Rate YoY Changes for All Product Loans

While Canadian consumers remain generally resilient, with higher savings rates, worsening delinquencies were observed in some consumer and product segments. The largest increase in delinquency, of 13 basis points (bps), was among Generation Z (born 1994 to 2010) consumers. This is likely because Generation Z borrowers are early in their careers and may not yet have the levels or stability of income that enables them to weather the current environment of higher inflation and interest rates as easily. 

Additionally, Generation Z consumers have displayed higher growth rates in origination volumes than other generations over the past few quarters, as many of them enter the market for the first time. For some, this is the first time they have experienced a high interest rate environment, and they may be experiencing some payment shock. 

“Canadians, like the economy, remain persistently resilient. However, the combined pressure of a high cost of living and elevated interest rates has created a payment shock, as the cost of debt has grown even heavier for some Canadian households. While some financial pressure has been offset through continued savings growth and strong employment, many Canadian consumers have accessed credit as a means to short-term liquidity.”  

- Matthew Fabian, Director, Research and Industry Insights


Average Consumer Balance, by Product*

*Represents the average balance held by a consumer across each type of product (consumers can have multiple instances of same product)

The number of Canadian consumers holding an outstanding credit balance increased 3.3% from Q1 2023. While the number of consumers taking on higher credit balances rose across all risk tiers, subprime consumers – the riskiest segment – experienced an 8.9% YoY growth rate.

While the number of consumers carrying a credit balance has grown, there has also been an increase in average balances per consumer across credit products. This increase in average balances can be largely attributed to higher spending habits and increased interest rates on variable-rate loans. Card balances rose the most, with the average consumer holding just over $4,000 in card balances – up 9% from prior year. This increase was driven by higher spend rates – the average consumer spent $2,100 on their cards2 in Q2 2023, up 1.5% from prior year, while below prime consumers spent $1,300, up 4% YoY. As spend increased, the amount that consumers paid against their card balances each month reduced by 2.8% YoY. 



“Lenders have held steady in balancing their risk strategies in the current macroeconomic context, but this environment continues to place some Canadians under stress, as balances grow and minimum payments are higher than before. Lenders should maintain a growth strategy that allows for financial inclusion, by focusing on resilient consumers and helping those vulnerable to economic shocks.” 

- Matthew Fabian, Director, Research and Industry Insights


Join our Q2 2023 Credit Industry Insights Webinar for additional insights.

Complete the form to receive the summary

We're sorry, your request failed. Please try again in a few moments.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.