The growth in consumer debt loads slowed to its lowest pace since before the recession in the second quarter of this year, a major credit monitoring agency reported Thursday.

Consumer debt growth was about 30 per cent lower in the second quarter than a year earlier Equifax Canada said in a quarterly survey.

The report found that not including mortgage debt, consumer debt loads were 3.1 per cent higher year-over-year in the second quarter of 2012 compared to the same three months in 2011. At that time, the annual pace of growth was 4.4 per cent.

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Growth in consumer credit slowed to its lowest point since before the recession. (Elise Amendola/Canadian Press)

"It is very encouraging to see non-mortgage consumer indebtedness increase at a very moderate rate with most of the growth coming from people’s existing credit facilities, as opposed to opening new accounts," said Nadim Abdo, vice-president of consulting and analytical services at the company.

The report found that high-interest credit card debt fell by 3.8 per cent in the quarter and consumer bankruptcies were down 4.5 per cent from a year earlier. Average credit card debt has now decreased for seven consecutive quarters, the report found.

Bank loans and lines of credit both increased slightly from the level they were at a year ago.

The category of debt that showed the largest increase was bank loans and leases, which grew by eight per cent over the same period last year.

Demand for new credit drops

Overall, the slowdown was encouraging, Abdo said. And most of the growth appeared to come from people's existing credit rather than new accounts, another sign of improvement, Abdo added.

"For the last couple of years we have seen almost double digit growth in some cases, it slowed down a bit last year, but we have never seen it slow down as much as we have (in the second quarter) probably for the past five or six years," he said.

The 3.1 per cent rate of debt growth was slightly lower from the pace of growth seen in the first three months of this year, when non-mortgage consumer debt grew by an annualized pace of 3.4 per cent.

The agency's credit seeking index — which measures the velocity at which consumers are seeking new credit — suggested that consumer demand for new credit is now six per cent lower than it was before the 2008 financial crisis.

"We remain to be in a very low interest rate environment, so you might expect people to borrow more but maybe they are listening to the Minister of Finance and other people who are encouraging them to deleverage," Abdo said.

"We are seeing —not deleveraging — but certainly a significant slowdown in the growth rate of credit this quarter."

With files from The Canadian Press