RATESDOTCA finds disconnect between debt beliefs and national average
Using a credit card to extend purchasing power is common consumer behaviour - but while carrying a balance may be the ‘new normal’, a survey finds cardholders are often incorrect about how their own debt compares to the rest of Canadians.
RATESDOTCA’s Debt Denial study, which polled 6,090 credit card consumers, finds 27.5% of respondents are wrong in how they perceive their debt, with 22% mistakenly believing they owe less than the national average.
“We found that Canadians want to believe their credit habits are sustainable and responsible,” says Penelope Graham, Editor at RATESDOTCA. “However, 42% of those who believe their debt is on par with the average are actually carrying more than the norm.”
Interestingly, the survey found the opposite also holds true: 35.4% of those who believe they have too much debt actually have less than their peers.
To find the extent of debt denial in Canada, RATESDOTCA polled respondents on their credit card balances as well as their sentiments regarding their debt. The findings were then cross-referenced with the average Canadian credit card balance of $2,627* to determine how cardholders’ perceptions aligned with reality.
*Calculated by Canada.CreditCards.com based on data from RBC Economics, Canadian Credit Trends on Oct. 31, 2014, and Statistics Canada
Additional survey findings include:
- 63.6% of Canadians think their credit card debt is lower than average
- 10.9% believe their debt is higher than average
- 25.4% believes their debt aligns with the national average
- Of those who mistakenly believe they carry an average amount of debt, 46% owe more than $8,000
- 20.67% of total respondents reported a credit card balance higher than $5,000
- 39% of total respondents say they are comfortable with the amount of debt they carry