TORONTO, ONTARIO--(Marketwired - Aug. 4, 2016) - As Canadians enjoy the warm weather, millennials have proven to be most aware of how they are 'spending' their summers. Even during the season where one third of the group (38 per cent) acknowledge spending more, millennials remain the most committed of any generation to paying off their bills on time.
Millennials' Credit Chronicles
Millennials owe an average of $2,000, which is still far lower than the $3,500 owed by the echo and baby boomers. Millennials are also the least likely of any age group (14 per cent) to carry a balance over $5,000, compared to 26 and 30 per cent of those 35-54 and over age 55, respectively.
The report, conducted by Pollara, also revealed:
- More than any other age group, millennials feel guilty after a high spending season (56 per cent);
- 47 per cent of millennials will pay off their total credit card balance in advance of summer, compared to 34 per cent of Canadians between the ages of 35 to 54; and
- Of the 31 per cent of millennials who will use their credit card or a line of credit this summer, 27 per cent will pay off their balances in full when they receive a statement, compared to only 18 per cent of those between the ages of 35 and 54.
Additionally, the 2016 BMO Wealth Management Survey found millennials consider spending impulsively more of a long-term concern than any other age group. Millennials also hold concerns about maxing out credit cards and having the means to pay only the minimums.
It's all in the rewards
Most millennials (81 per cent) have a credit card with a rewards program, with cash back rewards representing the dominant preference of the group (59 per cent). Millennials are also savvy rewards collectors, preferring to use their rewards credit card (41 per cent) over other methods of payment. They are also the most likely group to switch to a different financial institution offering a superior rewards card, even if only for a limited-time promotion (40 per cent). For those millennials who collect cash rewards, they are the most likely group to use their earned cash towards paying off bills or debt and putting the money into savings (47 per cent and 34 per cent of the group respectively).
Nick Mastromarco, Managing Director of Loyalty and Partnerships, BMO Bank of Montreal, notes millennials are on the right track, but could benefit from additional planning.
"Millennials are wise beyond their years when it comes to managing finances, and they have some good habits already in place," said Mr. Mastromarco. "However, while millennials lead in paying off summer spending bills in full as they come up, they still express concerns about spending beyond their means. Speaking to a financial advisor on a seasonal basis can help create a balance between planning and enjoying oneself. It also provides insight to offers that reward customers for their spending."
Summer spending tips for millennials
With student debt, a thirst for travel and being faced with an increasingly pricey real estate market, millennials have a unique financial situation compared to past generations. It's important that they recognize how to maximize incentive programs to offset costs. BMO offers ideas to help reward oneself, including:
- Using BMO's rewards calculator to see how much Cash Back or AIR MILES you could earn in a year. Click here to see where your rewards can take you.
- Consider switching your primary credit card to one with rewards benefits if your current card doesn't offer any.
- Capitalize on limited-time credit card promotions, such as earning 2x the rewards with a BMO CashBack MasterCard (with no annual fee) for the first six months*.
To learn more about BMO's credit card offerings and limited-time summer promotions, visit: http://www.bmo.com/main/personal/credit-cards/bmo-cashback-mastercard
Get 2% cash back with a BMO CashBack MasterCard for the first six months. *Limited time offer. Terms and Conditions apply, visit bmo.com/double for details.
The survey results cited in the Bank of Montreal Summer Spending Report, conducted by Pollara, are compiled from a random online sample of 1,003 Canadians, 18 years of age or older with surveys conducted between May 16th and 19th, 2016. A probability sample of this size would yield results accurate to ± 3.1 percent, 19 times out of 20.
About BMO Financial Group
Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of $681 billion as of April 30, 2016, and over 45,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.