TransUnion: Canadians demonstrate financial resilience, but remain cautious about credit and spending, focusing on paying down debt

TORONTO, September 28, 2021 (GLOBE NEWSWIRE) – TransUnion’s most recent Consumer Pulse * study shows that Canadian consumers continue to be resilient and remain positive about their financial outlook as the economy reopens. More than half of Canadian consumers (54%) said they had some optimism about the future, and only a third said their household income is currently negatively affected by the COVID-19 pandemic, compared to 63 % at the height of the pandemic in april 2020. Despite this optimism, Canadians have continued to defer discretionary spending and remain generally cautious about granting new or additional credit, although there are some generational differences.

The study also showed that a small percentage of consumers are victims of digital fraud, as they appear to be savvy against schemes and use tools such as credit monitoring to mitigate fraud attempts.

“As the economy reopens, Canadians have remained resilient and have high hopes for their financial future,” said Matt Fabien, director of research and financial services consulting at TransUnion. “While many consumers stay cautiously on the sidelines, cut spending and wait for additional credit, younger generations – Gen Z and Millennials – are showing a greater appetite for both credit and increased discretionary spending. compared to older generations. ”

Canadians Pay Off Debt During COVID-19

The financial impact of the pandemic continues to decline, with 33% of survey respondents indicating that their household income is currently negatively affected by COVID-19, down two percentage points from the last period of time. ‘investigation, 2-7 June 2021, and down significantly from 2020. This decrease could be due to government subsidies and lender deferral programs that have helped consumers weather the economic shock of the pandemic.

As the financial effects of the pandemic ease, Canadians continue to actively deleverage and repay their debt. A quarter (25%) of those surveyed said they expect not to be able to pay their current bills and loans in full, compared to 70% of consumers who expressed concerns about their ability to pay their bills the week of March 30, 2020. This debt reduction has created a cash surplus among Canadian households – which may be due to pandemic restrictions and the inability to spend in person. Four in five respondents (83%) say they have not been past due on their bill or loan payments in the past three months, in line with TransUnion’s findings in the Q2 2021 Credit Industry Insights Report (CIIR ), which showed a drop in defaults. on all credit products throughout the pandemic.

Generational divisions emerge around credit demand and spending as the financial impact of the pandemic eases

While credit performance remains healthy in Canada, and despite the generally positive financial outlook for consumers, many of them are reluctant to take out additional loans. More than three-quarters (76%) of Consumer Pulse survey respondents indicated that they do not plan to apply for new credit or refinance an existing credit in the next year. However, this is not consistent across generations, with Gen Z and Millennial respondents demonstrating higher credit demand. Almost half of Gen Z respondents (48%) and 34% of Gen Y respondents indicated that they plan to apply for new credit or refinance an existing credit in the next year. Gen Z also demonstrated a greater willingness to spend more than other generations, with 22% saying they had increased their discretionary spending in the past three months, compared to 12% of Millennials, 11% of Gen Xs, and 5% of Babies. Boomers. Overall, 47% of consumers say they have reduced their discretionary spending in the past three months.

“We are seeing an imbalance in consumer demand for lines of credit, auto loans and mortgages as younger individuals demonstrate that they are more prepared than older generations to increase their spending,” said Fabian. “As the economy reopens, it remains to be seen what Canadian spending levels will look like given pent-up demands and excess cash flow, but we expect Gen Z and Gen consumers. Y continue to lead the way in credit application and spending. ”

Consumers become savvy against digital fraud

As the prevalence of digital fraud attempts continues to increase, TransUnion’s most recent quarterly fraud analysis found that the percentage of digital fraud attempts increased by 44.9% when compared to the second quarter of 2021 compared to Q2 2021. Q2 2020. While 30% of Consumer Pulse survey respondents said they had been targeted by fraud in the past three months, the percentage of consumers who reported being victims is only 3%. One potential reason for the low percentage of casualties is the fact that consumers take an active role in monitoring their credit, with 44% of respondents saying they monitor their credit at least once a month, compared to 41% in the previous survey. period.

Millennials were more than twice as likely to have been a victim of fraud than any other generation, with 6% reporting that they had acted as part of a fraudulent scheme, compared to 3% for Gen Z, Generation X and babies -boomers. The most frequently reported digital fraud scheme was phishing.

TransUnion’s COVID-19 Support Center provides useful information to consumers who are concerned about their ability to pay their bills and loans. The full Consumer Pulse study can be viewed here.

* The most recent Consumer Pulse study includes a survey of 1,042 Canadian consumers between August 16 and 20, 2021.

On TransUnion (NYSE: TRU)

TransUnion is a global information and knowledge society that makes confidence in the modern economy possible. To do this, we provide a complete picture of each person so that they can be reliably and securely represented in the market. As a result, businesses and consumers can transact with confidence and achieve great things. We call it Information for Good.® TransUnion provides solutions that help create economic opportunities, great experiences and personal empowerment for hundreds of millions of people in over 30 countries. Our clients in Canada include some of the largest banks and card issuers in the country, and TransUnion is a leading provider of credit analysis, fraud and analytics solutions to the finance, retail, telecommunications, utilities, government and insurance industries.

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Source: TransUnion

2021 GlobeNewswire, Inc., source Press Releases

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