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household finances

Despite tight price-competition among retailers, consumers remain cautious.Chris Young/The Canadian Press

Personal debt levels were flat in the fourth quarter as Canadians bucked the trend of racking up more credit during the holiday season.

The average Canadian consumer's total debt – excluding mortgage – in the fourth quarter of 2013 increased marginally to $27,368 from $27,355 in the third quarter, according to the latest analysis of credit trends by TransUnion, released Wednesday.

But TransUnion's Tom Higgins said "it is really hard to say that Canadians are getting things under control."

"We may not be ratcheting [debt] up as we were two, three and four years ago but it's still going up," he added.

On a year-over-year basis, the latest TransUnion report showed that total debt fell 0.42 per cent to $27,368 from $27,485 – the highest debt level on record.

Debt levels generally rise in the last quarter of the year because of the holiday shopping season, said Mr. Higgins, TransUnion's vice-president of analytics and decisioning services.

"Total debt in the fourth quarter remained essentially flat, which means Canadians may have begun potentially deleveraging, utilizing less credit this past holiday season. As in the recent past, we will need to observe this variable in the coming quarters to confirm if this is a new trend."

The TransUnion numbers include credit card debt, car loans, instalment loans and lines of credit.

Vancouver residents were the least cautious, posting significant increases in debt levels on both a quarterly and yearly basis.

Vancouver posted a 2.25-per-cent rise to $41,077 in the fourth quarter from $40,174 in the third quarter. On a yearly basis, the jump was 7.09 per cent, from $38,357.

The other major cities showed notable decreases on a yearly basis, but Montreal and Ottawa experienced hikes on a quarter-to-quarter basis.

"It's encouraging to see significant drops in debt for most of the major markets in Canada," Mr. Higgins said. "Vancouver is an outlier in this scenario, but it should be noted that their unemployment rate – a major driver in consumer spending – is much lower than what is observed in other larger cities such as Toronto and Montreal."

Montreal's quarterly increase was 0.19 per cent, to $18,563, while that of Ottawa was 0.05 per cent to $24,449.

On a year-over-year basis, Montreal posted a 5.54-per-cent drop from $19,651 and Ottawa a 3.72-per-cent decrease from $25,393.

Among provinces, British Columbia, Saskatchewan and Newfoundland and Labrador posted increases in debt levels on a yearly basis, at 4.17 per cent, 13 per cent and 1.74 per cent, respectively.

TransUnion also reported on Wednesday that delinquency levels in all product categories except auto loans declined in the fourth quarter.

Credit card delinquencies were down 19.9 per cent year-over-year at 0.24 per cent, while lines of credit fell 24.8 per cent to 0.14 per cent.

Instalment loans fell 17.9 per cent to 0.97 per cent year-to-year, while auto loans were up 14.2 per cent to 0.11 per cent.

"Though we observed an increase in auto captive delinquencies, these levels are very low and are not a concern," said Chris Dias, TransUnion's senior vice-president of product innovation and credit analytics.

"The bigger story is the continued decline observed in delinquency rates for credit cards, lines of credit and instalment loans. These are significant drops, and coupled with lower debt levels in some of Canada's major markets, this is a good story for both consumers and lenders. When both delinquencies and debt go down, we anticipate consumers may find more opportunities to gain access to better credit offers as competition for their business increases."

TransUnion derives its personal debt statistics from its national consumer credit database, which is culled from anonymous credit files.