New TransUnion.ca Survey Finds Students Fund University Life with Credit
TORONTO, August 7, 2009 – More than one million students attend Canada’s more than 90 universities each year, according to the Canadian University Guide. Now, a new survey commissioned by TransUnion.ca and conducted by Zogby International suggests that many of these students could likely benefit from a crash course in money management. The survey which queried Canadian adults who previously attended university, revealed that more than half used a credit card to fund expenses such as groceries, books, tuition and entertainment during those school years. Moreover, one in four respondents said they accumulated $1,000 dollars or more in credit card debt as a result.
In addition, the survey results suggest that some university students may be unaware of the importance of sticking to a budget while in school – one in four respondents said paying off bills was their biggest challenge while they were a university student.
“As the next wave of future professionals head to university with the global financial crisis still looming, it’s critical that they are educated about the importance of managing their money responsibly and the consequences of overspending,” said Tom Reid, director of consumer solutions for TransUnion.ca. “By helping Canadians at an early age, we can empower them to make more informed financial decisions before they enter the workforce.”
TransUnion.ca is providing a list of tips to help both parents and students discuss and build money management skills.
1. Create a spending plan – Parents and students should work together to develop a monthly budget. This can help students understand exactly how much they need to pay toward their debts and how much they can afford to splurge. Fairly low interest rates on student loans make it possible to place the short-term focus on paying off high interest credit card debts.
2. Beware of “Free” - University students should be wary when signing up for a credit card to get a free item. Students should always read the card’s details carefully to understand exactly what the agreement entails.
3. Understand finances - Parents should help their children understand their financial situation before going off to university so that students can make educated financial decisions while spending money at university. Regularly reviewing credit card and loan records along with their credit reports is a good way to understand where they stand at any given time.
4. Watch for danger signs - Negative records such as late payments and collection accounts can remain on credit reports for six years. Students and recent graduates can keep their future finances healthy by avoiding these problems from the beginning. Cell phone bills and other types of debts, even when not reported directly, can sometimes be turned over to collection agencies who may then report them to the credit reporting companies, so students should make sure to pay all their bills on time every month.
5. Prepare for the unexpected - Being prepared for the worst-case scenario can help students and recent graduates avoid financial problems in the event of an unexpected financial emergency. To start, they should try to save enough to cover their expenses for two to three months especially if they are employed. If they find themselves out of a job or unable to pay back their debts, they should immediately call their creditors and lenders to explain the situation. Federal and provincial student loan programs may have debt reduction and interest relief programs that assist students during periods of financial hardship.
6. Consider consolidating - Look into your loan consolidation options. Often, students who consolidate loans within six months of graduation or who sign up for automatic payments can save even more.
For more information about credit management, please visit www.transunion.ca.
Zogby International was commissioned by CKPR to conduct an online survey of 500 Canadian adults from 7/16/09 through 7/20/09. The margin of error is +/- 4.5 percentage points. Margins of error are higher in sub-groups.
As a global leader in credit and information management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering comprehensive data and advanced analytics and decisioning. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Based in Toronto, with global headquarters located in Chicago, Illinois, TransUnion provides local service and support throughout Canada. Visit www.transunion.ca to learn more.