Canadian consumers kept on borrowing more and more through to the end of 2014, a report from credit monitoring agency TransUnion says.

The average Canadian owed $21,428 not including any mortgage debt in the fourth quarter of last year. That's up by 2.3 per cent compared to the same period a year earlier, the report says.

The 2014 figures are all the more eye-opening considering they signal a reversal of course — by and large Canadians were paying down their debt in 2013, TransUnion says, before deciding to take on more for some reason through 2014.

"Canadians began to deleverage during the latter half of 2013, but our latest data show that consumers once again increased their balances throughout much of 2014," the company's director of research Jason Wang said.

"This trend is likely to continue after the recent rate cut by the Bank of Canada made borrowing more affordable."

In late January, the Bank of of Canada surprised almost everyone by suddenly deciding to cut its benchmark interest rate

Although they're not obligated to do so, banks base the rate they charge to their customers to borrow and save money broadly on the central bank's rate. That means the Bank of Canada's move is likely to make borrowing look more affordable in the short term. Moves by two of Canada's biggest banks yesterday to cut their mortgage rates suggests that's what's happening

But TransUnion's numbers do suggest that even though we're borrowing more on the whole, consumers seem to be aware of the importance of paying down high-interest debt like credit cards, even if they're taking on more lower-interest debt like mortgages and lines of credit.

Credit card balances shrink

Balances on lines of credit increased by 4.4 per cent to an average of $30,554 last year, the company says. But credit card balances dropped more than two per cent from $3,738 to $3,659.

"It's clear that consumers are finding good opportunities in the line of credit … areas, and they are preserving these relationships by making on-time payments," Wang said. "It is therefore understandable to see consumers prioritize payments to this product class, which enjoys one of the lowest delinquency rates as a result."

Indeed, delinquency rates are dropping, down  2.6 per cent across the country across all forms of debt. A borrower is considered delinquent on their loan if they haven't made a payment on it in more than 90 days.

TransUnion's numbers also suggest oil-rich cities such as Calgary and Edmonton are tightening their belts, as debt levels in those two cities declined in 2014 compared to a year earlier.

"Both consumer debt and delinquency performance usually lag behind general economic conditions," Wang said. "We will monitor the market closely over the next few quarters to see just how big of an impact declining oil prices might have."