Canadians continue to rack up more debt but the speed at which they are piling it on is beginning to slow, the TransUnion credit agency reported Tuesday.
The average debt for about 24.8 million Canadians tracked by the report, which excludes mortgages, rose to $25,163 - up 4.3 per cent in the third quarter compared with a year ago.
The main source of non-mortgage debt for Canadians was vehicles, with credit card purchases a distant second.
However, despite the increase is the amount of debt, TransUnion said Canadians seem to be managing their debts better than they were, with delinquency rates and past-due balances dropping across the country.
The national credit card delinquency rate was down nearly 10 per cent in the third quarter of this year compared with a year ago when the Canadian economy was just beginning to recover from a major recession.
"There continue to be positive signs in the credit market as Canadians slowly manage out of the recession," said Thomas Higgins, TransUnion's vice-president of analytics.
"The most positive sign has been the significant decrease in past due balances (outstanding debt that is at least 30 days past due), which has dropped 15 per cent since last year after three years of increases."
Jeffrey Schwartz, executive director of Consolidated Credit Counselling Services of Canada, said the report was good news in that fewer Canadians have been missing payments, but bad news because overall borrowing continues to grow.
"We are still at extremely high levels on a debt-to-income ratio and that's a little scary and that's still going up, so that is a concern," he said.
Bank of Canada governor Mark Carney has voiced concern about consumer debt and the ability of borrowers to meet their payments once interest rates begin rising again.
However, Mr. Schwartz noted that borrowers are becoming more conscientious of their debt loads and he is seeing less panic among borrowers than at this time last year.
"They are looking for opportunities to get out of debt and even try it on their own so they can maintain their credit standing as best they possibly can," he said.
Quebec posted the largest increase in debt at 6.6 per cent, while Manitoba had the lowest increase at 2.6 per cent compared with the national average of 4.3 per cent.
However, TransUnion says that is still an improvement over the double-digit increases that had been going on since before the recession.
Canadian average credit card debt increased to $3,709 from the previous quarter's $3,614, but fell 1.7 per cent compared with a year ago.
Average auto loan debt increased to $16,183 from the previous quarter's $15,135, and up 9.8 per cent from a year ago.