Last month, national consulting firm MNP updated their quarterly Consumer Debt Index to include the 3rd quarter of 2021.
The MNP Consumer Debt Index measures consumer attitudes toward their own debt and gauges their ability to pay bills, endure unexpected expenses, and absorb interest-rate fluctuations without approaching bankruptcy.
The index is based on data collected by national polling firm Ipsos. Their most recent data came from survey responses of about 2,000 Canadian adults.
In the third quarter update for 2021, there were some interesting things reported by MNP about Alberta.
For example, did you know that nearly 60% of Alberta consumers are at least somewhat likely to take on more debt by the end of this year? Here are some of the options consumers are considering:
| Existing credit card | 36% |
| Buy now, pay later | 19% |
| Purchase financing | 15% |
| New credit card | 15% |
| Payday loan | 7% |
While the report doesn’t explain why these numbers don’t und up to 58%, I assume it’s because multiple respondents indicated that they intended to use multiple debt options.
But Albertans aren’t taking on more debt necessarily because they’re trying to take advantage of low interest rates.
According to the report, 34% of consumers say they are more relaxed than usual about carrying debt. That’s the lowest number in the country. Plus, Alberta consumers were the least likely among Canadians to say low interest rates provide a good opportunity to buy things they normally can’t afford.
Half of the respondents said that they’re $200 (or less) from financial insolvency. That’s up from 42% in the second quarter, which is the largest increase in the country.
Alberta has the highest proportion (31%) of consumers in Canada who don’t make enough money to cover their bills. Related to that 1 in 4 respondents said they wouldn’t be able to cope financially with an unexpected car repair or with being unable to work due to illness. The same number are confident they’d have to go into debt if they lost their job or had to even change jobs.
Consumer here in Alberta are also the most likely in Canada to say it’s becoming more expense just to take care of basic needs.
| Food is less affordable | 52% |
| Transportation is less affordable | 46% |
| Housing is less affordable | 37% |
| Clothing & household necessities are less affordable | 36% |
| Harder to save money | 54% |
| Harder to pay off debt | 40% |
The majority of Alberta consumers are actually worried about rising interest rates, with 60% afraid rising will affect their own financial situation. In fact, 34% are concerned that higher interest rates will increase the threat of bankruptcy.
