Credit Canada

Contact:          Laurie Campbell, Credit Canada
                        lcampbell@creditcanada.com
                        Tel:  (416) 228-2526

Credit Canada and Capital One Canada Take Important First Step to Educate Canadians about Financial Management

Toronto, ON (November 13th, 2007).   Today, Credit Canada and Capital One Canada proudly launched the first annual Credit Education Week which runs from November 13th to November 16th.  The national launch took place in Toronto at the University of Toronto’s Hart House, where an open Campus Fair was underway for the benefit of students and young people.

During the launch, the results of a national consumer survey of more than 4,000 Canadians were released. The survey clearly showed that the majority of Canadians do not have a sufficient understanding of basic personal finance and credit.

“The findings of this survey are a call to action.  To know that 90 percent of Canadians feel that they have more debt today than they did five years ago is an obvious indication that Canadians need to learn how to manage their money better,” said Valentine Lovekin, president and chairman of the Board for Credit Canada. “Clearly, Canadians are struggling with the financial basics and we hope that Credit Education Week can be a first step to help Canadians acquire the knowledge and skills they need to take control of their financial destiny.”

For Credit Education Week co-sponsor, Capital One, the results of the survey confirmed the company’s decision to invest in this valuable initiative to help educate Canadians about financial management.

“For many people, managing personal finances and making decisions about money management can seem daunting, but armed with the right information and a grounding in the
basics of finance, making smart choices is much easier,” said Rob Livingston, chief marketing officer of Capital One Canada. “At Capital One, we take financial education very seriously and want to contribute our knowledge and advice to help Canadians gain a better understanding of the importance of managing their finances wisely.”

The study results make it clear that many Canadians could benefit from more financial information and education. Highlights from the poll can be found at the end of this release (or the full results online on the media page at www.crediteducationweekcanada.com). 

Credit Canada and Capital One were joined by a number of other partners, including Visa Canada, Royal Bank, and Asset as well as other supporters in launching Credit Education Week. A recognized advocate for financial education, Linda Leatherdale, was the M.C. for the event, along with “Funny Money” creator James Cunningham, who delivers a sound financial management message with a humorous twist.  Other participants included Pran Bahl of Credit Counselling Canada, and Henrietta Ross of the Ontario Association of Credit Counselling Services.

Credit Education Week was created to empower Canadians to make wise financial decisions.  Throughout the week, Canadians will be given free access to expert financial advice through campus fairs, trade shows, and seminars.  A new Web site has also been created: visit (www.crediteducationweekcanada.com) for online tips and tools to help Canadians learn how to manage their finances more effectively.

About Credit Canada

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

Located in Toronto, Ontario, Capital One has offered Canadian consumers a range of competitive MasterCard® credit cards since 1996, when the company first introduced the Platinum MasterCard® in Canada.  Capital One Canada is a division of Capital One Bank, a subsidiary of Capital One Financial Corporation of McLean, Virginia (NYSE: COF)

National Consumer Study Highlights

 Fifty-three percent of Canadians do not have a personal/household budget; one in three (34%) Canadians who have a budget do not follow it regularly;
 Eighty percent of Canadians do not know their credit score;
 Well over half (63 percent) do not know how a credit score is determined; 
 One-quarter (26 percent) of Canadians do not consider the consequences of a rising interest rate when borrowing money;
 Twenty-eight percent of Canadians don’t know the interest rate of their credit cards;
 Over half (53 percent) of Canadians do not contribute to their RRSP each year;
 More than half of all Canadians (55%) admit to having more expenses than income at least one month a year, with 14 percent saying that’s true for six months, and six percent say they have more expenses than income 12 months of the year; 
 61 percent of Canadians do not have a financial advisor;
 52 percent of Canadians are not aware of free credit and debt counselling services available in Canada.

Furthermore, the study reveals that Canadians worrying about their financial situation:
 30 percent of Canadians feel that they will not be able to retire until after the age of 65
 17 percent of Canadians will need to make major changes to spending habits and will need to consider an action plan to help avoid bankruptcy if their income were to drop by 10%. Complete survey results are available by visiting www.crediteducationweekcanada.com/media.

Survey Methodology
These are some of the findings from a Torque Market Intelligence poll conducted on behalf of Credit Canada.  The online survey was launched on May 24th, 2007, with the final results submitted on June 26th, 2007. It is based on a randomly selected sample of 4,487 adult Canadians.  The margin of error is ±1.46 percentage points (19 out of 20).

National Consumer Survey, May/June 2007
Study Overview/Fact Sheet

Canadians’ ability to retire
 ��53% of Canadians do not contribute to their RRSP each year
 ��74% of Canadians who make over $100,000 per year annually contribute to their RRSP; however, only 26% of Canadians who make less that $30,000 per year contribute annually to their RRSP.
 ��13% of Canadians feel that based on their current situation they will never be able to retire and only 4% of Canadians feel they will be able to retire before the age of 50
 ��30% of Canadians feel they will not be able to retire until after the age of 65

Canadians are spending more than they are earning
 ��55% of Canadians have monthly expenses that exceed their monthly income at least once a year
 ��92% feel that Canadians have more debt than they did 5 years ago, however, only 7% perceive that it makes more sense to carry a larger amount of debt now opposed to 5 years ago
 ��17% of Canadians will need to make major changes to spending habits and will need to consider an action plan to help avoid bankruptcy if their income were to drop by 10%
 ��For 14% of Canadians, their monthly expenses exceed their monthly income more than 6 months of the year
 ��6% of Canadians have expenses that exceed their monthly income 12 months of the year

Some Canadians are not aware of the impact of interest rates
 ��26% of Canadians do not consider the consequences of a rising interest rate when borrowing money
 ��28% of Canadians do not know the interest rate on their credit cards

Many Canadians need credit education
 ��80% of Canadians do not know their credit score
 ��63% of Canadians do not know how their credit score is determined
 ��40% of Canadians do not pay their credit card off in full each month
 ��86% of Canadians believe that more Canadians are in credit distress now than they were 5 years ago.
 ��53% of Canadians believe that credit is too easy to obtain in Canada
 ��43% of Canadians have more than 3 credit cards
 ��37% of Canadians only pay the minimum required amount on their credit card each month opposed to paying it off in full
 ��14% of Canadians are surprised by the amount owed on their credit card when they receive the bill
 ��30% of Canadians carry a total balance on their credit card each month that is greater than $1000 (on average)
 ��Only 37% of Canadians who make less than $30,000 per year pay their credit card off in full each month; whereas 73% of Canadians who make $100,000 per year pay it off in full each month

Canadians’ perception of the housing market
 ��58% of Canadians feel that in the next 24 months, the housing market will continue to grow and prices will rise
 ��42% of Canadians think the housing market will stay the same or decline in the next 24 months
 ��4% of Canadians think that in the next 24 months, the housing market will decline by more than 10%

Few Canadians take advantage of financial management services
 ��61% of Canadians do not have a financial advisor
 ��52% of Canadians are not aware of any free credit and debt counseling services available in Canada
 ��Only 5% of Canadians obtain advice about credit and debt related issues from a free counseling service
 ��22% of Canadians obtain information about available credit through direct mail, whereas only 5% of Canadians obtain information from an industry expert.
 ��59% of Canadians who make over $100,000 per year have a financial advisor, whereas only 25% of Canadians who make less than $30,000 per year have a financial advisor

Canadians need to learn to budget more effectively
 ��53% of Canadians do not have a personal/household budget
 ��26% of Canadians say their number one concern surrounding debt /credit management is that they do not feel they are adequately prepared to deal with unexpected emergency expenses.
 ��34% of Canadians who have a personal/household budget do not follow it regularly

Regional findings
Ontario:
 ��30% of people from Ontario have 4 or more credit cards
 ��18% of people from Ontario don’t think they will be able to retire until after the age of 76

Atlantic Canada:
 ��63% of people from Atlantic Canada do not invest in their RRSP each year, opposed to 50% o Canadians in the rest of the country
 ��Only 39% of people from Atlantic Canada pay their credit card off in full each month, whereas 53% of Canadians from the rest of the country pay it off in full each month

Quebec:
 ��41% of people form Quebec regularly stick to a personal/household budget, however, only 29% of the rest of Canada have and regularly stick to a household budget

Demographic-Specific Findings
51+
 ��80% of Canadians between the age of 51 – 60 consider the consequences of a rising interest rate when borrowing money

21-30
 ��Only 66% of Canadians between the age of 21-30 consider the consequences of a rising interest rate when borrowing money.

Family
 ��31% of Canadians with more than 4 kids contribute annually to their RRSP, where as 56% of Canadians who have no kids contribute each year.

Survey Methodology
These are some of the findings from a Torque Market Intelligence poll conducted on behalf of Credit Canada. The online survey was launched on May 24, 2007, with the final results submitted on June 26, 2007. It is based on a randomly selected sample of 4,487 adult Canadians. The margin of error is ±1.46 percentage points (19 out of 20).