How Canadians are growing richer but deeper in debt

The Globe and Mail- Canadians are getting richer as stocks and house prices rise. Household net worth rose 1.3 per cent in the first quarter of the year, or $74-billion, to $6-trillion, Statistics Canada said today, as the value of assets eclipsed the rise in liabilities. “This follows a 1.8 per cent advance in the previous quarter,” the federal statistics gathering agency said. “Gains in the value of financial assets, especially equities, as well as increases in residential real estate contributed to the advance in net worth.”

Household debt also rose, particularly mortgages, Statistics Canada said. The ratio of household credit market debt-to-income now stands at 147 per cent, up from 144.9 per cent in the fourth quarter of 2009…

How Canadians are growing richer but deeper in debt – The Globe and Mail

Beware the coming credit card hit on Canadian families

The Globe and Mail- MBNA Canada Bank mailed notices to credit card holders last week, notifying them that the country’s No. 1 issuer of MasterCard will be changing the way it calculates minimum monthly payments. Other card companies are doing the same, in accordance with new federal regulations aimed at greater transparency for consumers.

As an example, MBNA cited an account balance that would have required a minimum payment of $185 in the past; as of August, that required payment will rise to $307, an increase of 66 per cent. A higher payment would reduce interest costs, MBNA noted, adding that it would also “help you pay off your balance faster.”

We now have detected yet another coughing canary in the exemplary Canadian coal mine. Exploiting low interest rates, Canadian households have taken on record personal debt ($1.4-trillion) – more than doubling it in the past decade to now equaling more than $40,000 for every man, woman and child in the country. This is the highest household debt in 20 of the most advanced economies of the Western democracies. More ominously, however inevitably, the number of Canadian households filing for bankruptcy (or taking alternative emergency measures) has also set a record. By year’s end 2009, more than 150,000 families were economic wrecks (up by 30,000 families from year’s end 2008)…

Beware the coming credit card hit on Canadian families – The Globe and Mail

Canada’s brewing debt storm

The Globe and Mail-Canadian borrowers are fast approaching a day of reckoning.

Lured by cheap money to buy up, buy in, expand and make over, families have pushed credit levels to a record high.

Now, mortgage rates are beginning to creep up and the Bank of Canada is poised to retreat from the record-low interest rates it adopted to fight the recession and spur recovery.

The end of the free-money era has left consumers more vulnerable than ever, and those who threw caution to the wind could soon face costs they can’t handle.

Household debt has surged three time faster than income in recent years and now stands at a record high of more than $1-trillion. Put another way, Canadians owe about $1.47 for every dollar of disposable income. Even more remarkably, they took on more debt during the slump – a first for a recession – because borrowing was so cheap…

Canada’s brewing debt storm – The Globe and Mail

Ottawa to reap billions from emergency mortgage ‘help’ to banks

 The Canadian Press – The US also announced an extension of their mortgage asset program, worth US$145 trillion. Unlike most lenders, the Canadian government takes on no …

The Canadian Press: Ottawa to reap billions from emergency mortgage ‘help’ to banks

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