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Most Canadians carry debt longer than they expected.

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Canadians just love their credit cards. And we've been piling on the debt for years. But it appears consumers are beginning to tackle that debt mountain.

There are promising signs that Canadians are heeding the warning about unsustainable debt loads, and are taking advantage of low interest rates to pay down the pile of debt on their personal balance sheets, says Tom Higgins, vice-president with credit trend watcher TransUnion.

TransUnion's quarterly analysis of Canadian credit trends found that average consumer debt (excluding mortgages) was flat at $25,603 in the second quarter of this year, up only $6 from the first quarter, and down from $25,709 at its peak in the fourth quarter of last year.

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While that doesn't seem like much, it marks the first decrease in Canadians' credit balances after 26-straight quarterly increases.

"It's the first time we've seen this in many years," Mr. Higgins says, adding that the big question now is whether Canadians will continue to pare their debt with the Bank of Canada making clear this week it's unlikely to raise interest rates any time soon.

"Over the last year or so we've been moving to curb our debt, so hopefully that trend will continue," he says, although it's not expected to dip quickly.

"It's going to be a slow pace, but as long as it's moving in the right direction, I think that's that the best we can hope for ... and keep the message out there that we need to curb the debt as much as we can."

Canadians in British Columbia, with an average debt of $36,819, have more debt to pay down than those in Quebec, with $18,268, TransUnion's second-quarter data show.

TransUnion also says people are being smarter about their borrowing, too, with less being charged to their credit cards, which have higher interest rates, and more being put on lines of credit, which have lower rates.

Mr. Higgins notes though that the low rates we're enjoying now will eventually give way to higher rates, and Canadians need to be prepared.

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"People will see an interest-rate impact and see their costs go up and it will be tougher for them to manage," he says. "We're still vulnerable if something unexpected does come up in the economy," and if rates have to rise quickly.

With that in mind, I think I need to go pay a few credit card bills.

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