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Equifax tracks the proportion of people who fully pay off their credit cards each month, data that provides a good measure of cash flow, Johnston says. The proportion has declined on a year-over-year basis every month since August 2017, shortly after the Bank of Canada started hiking rates again after a seven-year hiatus. “We do think cash flows are starting to be impacted,” he said.

According to Johnston, about 43 per cent of all non-mortgage debt is lines of credit, much of it home equity lines of credit, which is variable rate. Every time borrowing costs rise by 25 basis points, “your monthly payment changes. We’re starting to see that flow through a little bit, because people are still using a lot of lines of credit.”

There’s also a “lag effect” of about 3 months to 6 months between when credit growth slows and when delinquency rates rise, he said. Johnston declined to give an exact forecast for delinquencies, saying the timing is tricky, but probably in the fourth quarter this year or the first quarter next year, the rate will start to tick higher “by a few basis points.”

“We don’t see it spiking or whip-lashing back up,” he said. However, “we’ve become used to seeing this down trend where it’s been improving every single quarter. That’s sort of where we see it coming to the end.”

Bloomberg.com