Ninety-four per cent of respondents believe financial literacy should be a higher priority in schools
TORONTO, Oct. 1, 2019 /CNW/ - Canadians give themselves dismal grades when it comes to their understanding of common financial products, according to a national survey released today by insurance and money product comparison site Rates.ca. Specifically, when considering financial literacy about credit cards and mortgages, 44 per cent and 62 per cent of Canadians respectively assessed their skills at six or below out of 10.
Financial literacy as it relates to credit cards is more evenly split down gender lines (48 per cent for women vs. 41 per cent for men), while more women than men rank themselves at six or below when considering their knowledge of mortgages (67 per cent vs. 55 per cent).
An overwhelming majority of Canadians surveyed (94 per cent) believe that schools should place a greater emphasis on teaching financial literacy. Close to half (46 per cent) of respondents said that children should be independent and in charge of their own credit cards by age 18, while over one third of Canadians feel that 21 is the appropriate age for this responsibility. Moreover, 15 per cent of respondents feel young adults are not ready for their own credit card until age of 25.
"In 2019, it's troubling that Canadians continue to have a low comprehension of how money works," said Sara Kesheh, Vice President, Money, Rates.ca. "Financial literacy is the cornerstone to ensuring your money works hard for you. Without that knowledge, saving, debt management and even achieving a desired lifestyle may all be negatively impacted. That's why we make it our mission to educate Canadians on money and help them make better choices."
Credit Card Comprehension
While 75 per cent of Canadians have one to three credit cards, and close to half of respondents use their cards for 10 purchases or more a month, almost three quarters (68 per cent) of them didn't know that interest on credit cards is calculated daily on their balance.
Considering that three of 10 of respondents state they are unlikely or somewhat unlikely to make the minimum monthly payment on the card, some Canadians could be unknowingly paying significant dollars in interest.
Mortgages appear to be a particularly difficult money matter for respondents, especially with the recent regulatory changes. Half of Canadians surveyed were not familiar or unsure what types of mortgages are available to them. And, nine out of 10 respondents don't know that interest is charged semi-annually on a fixed rate mortgage, while 61 per cent don't know that a minimum down payment of 20 per cent on a mortgage is required to avoid paying government insurance.
"Canadians do not need to be alone in their lack of knowledge when it comes to money matters," said Kesheh. "We need to collectively close this knowledge gap, through reading articles, news, and leveraging the many online resources available, but perhaps more importantly through conversation, asking questions and being curious."
Other Rates.ca survey findings:
- Forty per cent of Canadians surveyed don't know their credit score.
- More than a third of respondents (36 per cent) of respondents share a joint credit card with either a partner, parent or children.
- When it comes to negotiating a mortgage, 43 per cent of respondents were comfortable accomplishing this task online, compared to 57 per cent who preferred to work out a deal in person.
To review full survey, visit Rates.ca.
About the survey
The Financial Literacy Rates.ca survey was conducted by Forum Research between September 12–15, 2019 and polled 1061 respondents across Canada. The sample's age ranged from 18 to 65+ years old. Survey questions were presented via telephone and respondents provided answers through the touchpad of their mobile device or home phone.
Rates.ca is Canada's premier rate comparison destination for insurance and financial products. Rates.ca is a one-stop-shop for the best rates on the market, providing comparisons for auto insurance, mortgages and credit cards. Headquartered in Toronto, Ontario, Rates.ca is located at 360 Adelaide Street West, Suite 100, Toronto, ON, M5V 1R7
For further information: or to arrange an interview, please contact: Masha Mikey, Proof Inc. for Rates.ca, [email protected], (416) 969-2664; Cameron Penner, Proof Inc. for Rates.ca, [email protected], (416) 969-2705