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Post-secondary students get mixed marks when it comes to understanding credit, budgeting: RBC Poll

TORONTO, Sept. 3, 2014 /CNW/ - Both post-secondary students and their parents wish students knew more about personal finance and financial literacy, according to the latest 2014 RBC Student Finances Poll. Almost nine-in-ten students (87 per cent) reported that they still have a lot to learn about managing finances; more than a third (42 per cent) wished they knew the cost of small extras they required and 41 per cent wished they knew more about budgeting. The majority of parents (59 per cent), meanwhile, wished their students knew the importance of saving and early planning.

Students are also concerned about unexpected financial needs, the details of paying back their student loans, and the shape of their finances upon graduation. Students overwhelmingly agree that their parents have been good financial role models, and are very inclined to discuss school-related finances. Credit, however, is more of a mystery.

"Interestingly, while students say they have a lot to learn about managing their finances, credit knowledge remains a bit of a mystery to students and parents alike," said Melissa Jarman, director, Student Banking, Royal Bank of Canada. "In our report card, students were less knowledgeable about credit than their parents, but some parents didn't fare all that much better. This shows us that there is a lot for both parents and their children to learn about managing finances to ensure that everyone is getting the right information. Speaking to a financial advisor about managing finances, including credit, is an important step for anyone."

This isn't to say that students aren't interested in their parents' opinions when it comes to things like taking on debt - in fact, 80 per cent of students responded that they ask their parents about the topic, and consult their parents on financial issues on everything from major purchases to investing.

"Maintaining a strong credit score will help students later in life as their goals change from paying for education to buying their first car, starting a business or buying their first home," said Jarman. "It's our job to help people understand how using credit responsibly can help them down the line. Many students get their first credit card when they begin post-secondary education, so this is the time to educate them on responsible credit use."

To help parents and students increase their financial knowledge, RBC is sharing some myths and realities of credit scores.

Myths & Realities of Credit Scores

  1. Myth: There is no harm paying your bills late as long as it only happens occasionally.
    Reality: Missing even one bill payment can negatively affect your credit rating - this includes your mobile phone, internet and credit card bills.

  2. Myth: Applying for a lot of different credit cards doesn't affect your credit score.
    Reality: Applying for a lot of different credit cards can hurt your credit score, so don't apply for a card for the free swag that comes with it - it could end up costing you more in the end.

  3. Myth: In Canada, your credit rating is affected by your age, income and gender. The higher a person's income, the better that person's credit rating will be.
    Reality: Your credit rating is based on your record of managing your finances responsibly. Lenders look at how you handle your financial obligations, such as whether you pay your monthly bills on time, carry a balance, or regularly miss payments.

  4. Myth: Checking your own credit will harm your credit standing.
    Reality: Checking your own credit history does not affect your credit rating. In fact, it's recommended that you request a report on an annual basis to check for errors.

  5. Myth: Asking for lower limit on any credit product will help your credit rating.
    Reality: Lenders like to see a big gap between your available limit and the amount of credit you're actually using. Apply for the credit you need and use it responsibly. While it's best to pay off your balance in full each month, you should always make the minimum payment.

About RBC's financial planning advice, resources and interactive tools
RBC's Advice Centre offers advice and tools for students. Interactive tools and calculators provide customized information covering many facets of personal finance, including the Student Budget Calculator and the Debt Reduction Plan. With the guidance of RBC advisors who are available to chat live, Canadians have access to free, no-obligation professional advice about RBC products and services and personalized one-on-one service. Further information is available at In addition, RBC's myFinanceTracker, a comprehensive online financial management tool, offers all personal RBC online banking clients the ability, at no cost, to create a set budget and track their spending habits. As well, RBC Virtual Visa Debit enables clients to pay for online, over the phone, or mail order purchases with funds directly from their bank account.

About RBC Student Finances Poll 2014
The 2014 RBC Student Finances Poll was conducted by Ipsos Reid through a national online survey of 1,180 students aged 17 to 24 and of 971 parents of students in post-secondary school (as of September 2014). Data were collected from June 6 to June 20, 2014. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian student population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. An unweighted, probability sample of this size, with 100 per cent response rate, would have an estimated margin of error of ±3 percentage points, 19 times out of 20. All sample surveys and polls may be subject to other sources of error, including, but not limited to, coverage error and measurement error.

Royal Bank of Canada is Canada's largest bank, and one of the largest banks in the world, based on market capitalization. We are one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, investor services and capital markets products and services on a global basis. We employ approximately 79,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 40 other countries. For more information, please visit

RBC supports a broad range of community initiatives through donations, sponsorships and employee volunteer activities. In 2013, we contributed more than $104 million to causes worldwide, including donations and community investments of more than $69 million and $35 million in sponsorships. Learn more at


Image with caption: "RBC Poll: Are post-secondary students making the grade when it comes to credit knowledge? (CNW Group/RBC)". Image available at:

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