Credit card performance weaker: DBRS

Amid ongoing economic headwinds, credit card performance deteriorated in the third quarter, according to a new report from Morningstar DBRS Inc.

The rating agency reported that delinquency rates and losses on securitized credit card portfolios rose in the last quarter. 

In September, the 30-plus day delinquency rate was up to 1.9%, compared with 1.78% in the same month a year ago.

Net losses rose to an average of 3.19% in the quarter, up from 2.91% in the same quarter last year.

At the same time, the average payment rate in the quarter came in at 56.3%, down from 57.7% in Q3 2024. 

The deterioration in card performance comes against the backdrop of an array of macro challenges for Canada, including higher U.S. tariffs and weaker population growth, which are weighing on business and consumer confidence, and hampering economic growth, the rating agency noted.

Despite efforts to boost growth by easing monetary policy, “the economic impact from the U.S. trade war is weakening the labour market and has led to an increase in unemployment, contributing to an increase in the number of filings for consumer insolvencies,” DBRS said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.