Survey finds New Canadians Know More about Establishing Credit

Survey identifies financial knowledge gaps and a subset of New Canadians who may face greater financial obstacles

TORONTO, Nov. 16 /CNW/ - A new survey commissioned on behalf of Credit Canada and Capital One Canada found surprising differences in financial knowledge between Canadians who were born here and newcomers to the country. While the general population has a financial literacy edge, interestingly the results show that newcomers are more familiar with credit scores than then general population. Sixty-five percent of newcomers who have been in the country for five years or less and 74 percent of those who've been in the country for six to ten years report that they know enough to make good decisions about their credit score, this compares to just over half (52%) of the general population.

The survey results also show that, as individuals' financial knowledge and familiarity with the Canadian banking system improve, their perceptions about their personal finances improve as well. In fact, Canadian newcomers who have been in the country for 6 to 10 years are significantly more positive about their finances than the general population, with 75 percent of these newcomers reporting their finances are good to very good compared to 69 percent of the general population.

"Our survey also identified a specific subset of new Canadians - the majority of whom are low-to-moderate income women - who report their financial situation as "poor" and say that they have difficulty accessing credit. The data shows that they are also more frequent victims of financial fraud," said Laurie Campbell, executive director, Credit Canada.

    
    The findings determined that this group of new Canadians:

    -   Is almost two-thirds (63%) women
    -   Is reasonably well educated, yet 40% live in households that make
        less than $25,000 per year
    -   Have significantly less trust in banks than other groups of new
        Canadians, yet more trust in government
    -   Are twice as likely to get a Pay Day loan than other new Canadians
    -   Significantly more likely to indicate they have been a victim of
        financial fraud (29%)
    

"As a country, we do a great deal to welcome newcomers as part of Canadian society," Campbell added. "We recognize that their success contributes to our success. But the results of our survey show that we could be doing a better job of reaching out to help people understand the basics of Canadian banking and finance so that they can access the information and financial tools they need to succeed."

This Angus Reid Public Opinion poll was conducted as part of Credit Education Week 2010 - this year's public awareness campaign focuses on addressing the unique challenges that Canadian newcomers face when accessing our financial system.

"Today's poll reiterates the importance of financial literacy for all Canadians, whether they've been here for generations or just arrived last week," said Rob Livingston, President, Capital One Canada. "We continue to believe that education is the key to empowering Canadians to make wise financial choices, which is why we have supported Credit Education Week since its inception in 2007."

The poll identified a number of interesting differences between newcomers who've been in the country for only 1-5 years, those who've been in the country from 6-10 years and the general population including:

    
    -   Compared to newcomers, Canada's general population is more likely to
        describe the Canadian financial system as confusing (44% to 26%). By
        contrast, newcomers to Canada find Canada's financial system
        significantly more stable (53% to 44%) and accessible (38% to 28%) as
        compared to Canada's general population.

    -   While the vast majority of new Canadians have credit cards (85%) and
        debit cards (83%), only 37% have a Line of Credit compared to 49% of
        the general population.

    -   While family is the top choice for both groups to turn to for
        financial advice (45% for new Canadians and 40% for the general
        population), newcomers are significantly more likely to pick friends
        (37% to 24%), the internet (27% to 17%), government (12% to 2%) and
        banks (41% to 28%)

    -   Growing up, new Canadians are twice as likely as the general
        population to have been taught in depth about saving money (26% to
        13%)
    

About the survey

From July 21st to July 27th, 2010, Angus Reid Public Opinion conducted an online survey among 531 New Canadians and 500 Canadians who are members of the general population. For the purposes of the study, New Canadians are defined as having lived in Canada for less than 10 years. The margin of error-which measures sampling variability-is +/- 4.4%, 19 times out of 20 for the general population and 4.25% for the population of New Canadians. The results have been statistically weighted according to the most current education, age, gender and region Census data to ensure as close a match as possible to the actual population of New Canadians (including country of origin) as well as well as for the general population. Discrepancies in or between totals are due to rounding.

About Credit Canada

Credit Canada is a non-profit charitable service that has assisted thousands of people with credit counseling and debt management programs since 1966. Credit Canada is a member of the Ontario Association of Credit Counseling Services and a Charter Member of Canadian Association of Credit Counselling Services

About Capital One

Located in Toronto, Ontario, Capital One has offered Canadian consumers a range of competitive MasterCard(R) credit cards since 1996, when the company first introduced the Platinum MasterCard(R) in Canada. Capital One Canada is a division of Capital One Bank, a subsidiary of Capital One Financial Corporation of McLean, Virginia (NYSE: COF). Capital One supports the responsible use of credit by integrating financial education into its products, and providing Canadians with the interactive Web site roadtobettercredit.ca.

For further information: Laurie Campbell, Credit Canada, 416-228-2526, [email protected]; Laurel Ostfield, Capital One, 416-549-2753, [email protected]