BMO Bank of Montreal

BMO Bank of Montreal

August 18, 2011 05:00 ET

Chill Out Canada-Students Smarter than You Think About Credit Cards

65 per cent of postsecondary school students use a credit card, and use it wisely

- Debit (81 per cent) and credit cards (65 per cent) are top payment preferences for Canadian students

- Students use their credit cards 12 times per month on average

- 73 per cent pay off their full balance every month

- 83 per cent say they are confident they know how to use their credit card effectively

TORONTO, ONTARIO--(Marketwire - Aug. 18, 2011) - Seems post-secondary students don't get the respect they deserve, at least not when it comes to how they use their credit cards.

According to BMO Bank of Montreal's 2011 Student Summer Survey, Canada's youth are prudent users of credit cards, treating them as payment vehicles, instead of borrowing instruments.

In the study conducted by Leger Marketing, post-secondary students across Canada showed a high level of financial literacy related to credit cards: 83 per cent said they are confident they know how to use a credit card effectively, and 73 per cent said they pay their balance off in full each month.

Clothing was the most often cited purchased item (65 per cent), followed by day-to-day expenses such as groceries and transit (63 per cent); entertainment, including movies and concerts (63 per cent); and larger ticket items, such as computers and other electronics (53 per cent).

"People presume students aren't financially literate or ready to manage a credit card responsibly, but students are telling us otherwise," said Su McVey, VP, Customer Communications & Marketing, BMO Bank of Montreal. "Our student credit card portfolio provides low-rate/no-fee options, and reward and discount programs designed to help students deal responsibly with their economic realities.

"Armed with the right card, conservative credit limits, and relevant information and advice, students do exercise an appropriate degree of prudence, which speaks well of their basic financial literacy and prospects for future financial health," added Ms. McVey.

Notwithstanding those observations, two findings were somewhat surprising: Only 47 per cent of post-secondary students collect some kind of rewards points on their credit cards and three in five (61 per cent) don't take advantage of the student discounts available to them.

"These are lost savings opportunities for students," said Ms. McVey. "For example, BMO's no-fee Student SPC MasterCard includes both a free SPC membership, which provides 10 to 15 per cent discounts at hundreds of fashion, food, entertainment, lifestyle and travel retailers across Canada, and the option of receiving AIR MILES reward miles or cash back loyalty rewards on their cards."

Almost one third of students polled indicated they did not know what a Student Price Card was.

"Students need to be aware of and use these discounts. They and their families work hard to pay for an increasingly expensive post-secondary education and we want them to take full advantage of every credit card feature that will help them lower the day-to-day costs of going to school," said Ms. McVey.

Through September and October, BMO will be focused on numerous initiatives to build more awareness among students of the savings a BMO SPC MasterCard can provide. In addition, as part of its ongoing commitment to 'Making Money Make Sense', BMO developed BMO SmartSteps® for Students to help them budget and minimize banking fees.

BMO's 2011 Summer Student Survey was conducted from May 18-26, 2011, by Leger Marketing. The sample was 625 Canadians, 18 years or older currently attending college or university. The margin of error is plus or minus 3.9 per cent.

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