Canadians give themselves dismal grades when it comes to their understanding of common financial products, according to a Rates.ca survey released on Tuesday.
When considering literacy about mortgages and credit cards, 62% and 44% of Canadians, respectively, assessed their skills at six or below out of 10.
The survey found that more women rank themselves at six or below than men when considering their knowledge of mortgages (67% vs. 55%) and credit cards (48% vs. 41%).
Mortgages appear to be a difficult money matter for respondents, as half of Canadians surveyed were unfamiliar or unsure about the types of mortgages available to them. Also, 90% don’t know that interest is charged semi-annually on a fixed-rate mortgage, and 61% don’t know that a minimum down payment of 20% on a mortgage is required to avoid paying government insurance.
When it comes to negotiating a mortgage, 43% were comfortable accomplishing this task online, while 57% prefer to work out a deal in person.
While 75% of Canadians have one to three credit cards, and nearly half of respondents use their cards for 10 purchases or more a month, 68% of them didn’t know that interest on credit cards is calculated daily on their balance.
"In 2019, it's troubling that Canadians continue to have a low comprehension of how money works," said Sara Kesheh, vice president of money at Kanetix Ltd., Rates.ca’s parent company. "Financial literacy is the cornerstone to ensuring your money works hard for you. Without that knowledge, saving, debt management, and even achieving a desired lifestyle may all be negatively impacted."
Forum Research conducted the survey on Sept. 12-15 and polled 1,061 respondents aged 18 to 65+ across the country.