The Rise in Consumer Credit and Bankruptcy: Cause for Concern?
AbstractCanadian households are saddled with unprecedented amounts of debt. As a percentage of income, debt levels of Canadians are higher than at any point in recent history and are now higher than those of American households. Recent debates have largely focussed on the housing market and on the risks associated with household mortgage debt. This report looks more specifically at consumer credit – i.e., automobile loans, credit card debt, and lines of credit, most notably – and personal bankruptcies. Consumer credit accounts for roughly 45 percent of total household interest payments and often offers variable interest rates, leaving borrowers more vulnerable to higher interest rates. Further, the rapid extension and use of relatively new consumer credit products, especially home equity lines of credit, raises real concerns about whether lenders and borrowers have been overly optimistic in regards to the risks associated with high consumer debt levels.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by C.D. Howe Institute in its journal C.D. Howe Institute Commentary.
Volume (Year): (2012)
Issue (Month): 346 (April)
Economic Growth and Innovation; Canada; household debt; consumer credit; Survey of financial Security; financial literacy;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kartik Athreya & Xuan S. Tam & Eric R. Young, 2011.
"A quantitative theory of information and unsecured credit,"
Working Paper, Federal Reserve Bank of Richmond
08-06, Federal Reserve Bank of Richmond.
- Kartik Athreya & Xuan S. Tam & Eric R. Young, 2012. "A Quantitative Theory of Information and Unsecured Credit," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 153-83, July.
- Kartik Athreya, 2008. "A Quantitative Theory of Information and Unsecured Credit," 2008 Meeting Papers 68, Society for Economic Dynamics.
- Kartik Athreya, 2004. "Shame as it ever was : stigma and personal bankruptcy," Economic Quarterly, Federal Reserve Bank of Richmond, Federal Reserve Bank of Richmond, issue Spr, pages 1-19.
- Shubhasis Dey & Ramdane Djoudad & Yaz Terajima, 2008. "A Tool for Assessing Financial Vulnerabilities in the Household Sector," Bank of Canada Review, Bank of Canada, Bank of Canada, vol. 2008(Summer), pages 47-56.
- James P. Feehan, 2012. "Newfoundland's Electricity Options: Making the Right Choice Requires and Efficient Pricing Regime," e-briefs, C.D. Howe Institute 129, C.D. Howe Institute.
- William B.P. Robson, 2012. "What to do About Seniors' Benefits in Canada: the Case for letting Recipients Take Richer Payments Later," e-briefs, C.D. Howe Institute 131, C.D. Howe Institute.
- Adam Aptowitzer & Benjamin Dachis, 2012. "At the Crossroads: New Ideas for Charity Finance in Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 343, March.
- Jason Allen, 2011. "Competition in the Canadian Mortgage Market," Bank of Canada Review, Bank of Canada, Bank of Canada, vol. 2010(Winter), pages 1-9.
- Igor Livshits & James MacGee & Michele Tertilt, 2006.
"Accounting for the Rise in Consumer Bankruptcies,"
Discussion Papers, Stanford Institute for Economic Policy Research
06-001, Stanford Institute for Economic Policy Research.
- Igor Livshits & James MacGee & Michèle Tertilt, 2007. "Accounting for the Rise in Consumer Bankruptcies," NBER Working Papers 13363, National Bureau of Economic Research, Inc.
- Igor Livshits & James MacGee & Michele Tertilt, 2006. "Accounting for the Rise in Consumer Bankruptcies," University of Western Ontario, Economic Policy Research Institute Working Papers, University of Western Ontario, Economic Policy Research Institute 20066, University of Western Ontario, Economic Policy Research Institute.
- Jim MacGee, 2010. "Not Here? Housing Market Policy and the Risk of a Housing Bust," e-briefs, C.D. Howe Institute 105, C.D. Howe Institute.
- Kristopher Gerardi & Andreas Lehnert & Shane M. Sherlund & Paul Willen, 2008.
"Making Sense of the Subprime Crisis,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 69-159.
- Kristopher S. Gerardi & Andreas Lehnert & Shane M. Sherlund & Paul S. Willen, 2009. "Making sense of the subprime crisis," Public Policy Discussion Paper, Federal Reserve Bank of Boston 09-1, Federal Reserve Bank of Boston.
- Kristopher S. Gerardi & Andreas Lehnert & Shane M. Sherlund & Paul S. Willen, 2009. "Making sense of the subprime crisis," Working Paper, Federal Reserve Bank of Atlanta 2009-02, Federal Reserve Bank of Atlanta.
- Alexandre Laurin & William B.P. Robson, 2012. "Achieving Balance, Spurring Growth: A Shadow Federal Budget for 2012," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 344, March.
- Ian Irvine & William Sims, 2012. "A Taxing Dilemma: Assessing the Impact of Tax and Price Changes on the Tobacco Market," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 350, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristine Gray).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.