News Releases
The years may change but one thing never does – the holiday season brings out the generosity in Canadians. According to a new BMO Bank of Montreal survey Canadians spent approximately $970 each during the holidays (on gifts and other related expenditures) with a large number choosing to put their purchases on credit cards.
The post holiday survey found that only 37 per cent of Canadians had a specific budget allocated for holiday spending and of those 14 per cent exceeded their budget. The approximate total spending on holiday-related purchases was $959, with Ontarians coming in the highest at $1,170 and Quebecers spending the least at about $599. Seventy-seven per cent of Canadians reported they spent the same or more than last year during the holidays.
"The survey results demonstrate once again that human nature will trump careful planning every time," said Maria Racanelli, Vice President, PCCG, BMO Bank of Montreal. "Even the best of intentions can come undone during the holiday season and most people get caught up in the buying and receiving of gifts. The key is to make sure you have a responsible plan for managing your debt and freeing up cash flow afterwards."
At least 71 per cent of Canadians surveyed say they carry a credit card balance, with 30 per cent carrying a balance of $1,000 or more. Sixty-eight per cent of survey respondents stated that part of that balance is related to holiday season spending. Of particular note is that of those who carry a balance, 24 per cent expect to take six months or more to pay off that debt.
"Our advice to those looking to manage their post holiday bills is not to panic. There are solutions which can help," said Ms. Racanelli. "One of the best tools to properly manage debt and reduce interest cost is to consolidate your higher cost debt such as credit card or department store credit into a single BMO line of credit. Personal lines of credit typically carry a much lower interest rate than other debt instruments, so it makes senseto consolidate and transfer higher cost debt into one manageable low cost instrument.
"For example, moving a $1,000 debt from a department store credit card with a 29 per cent interest rate to a BMO personal line of credit can end up saving more than $200 in interest charges over the course of the year," she said.
Ms. Racanelli recommends consumers consult with a financial advisor to develop a plan to help manage their current debt load, free up cash flow and become debt free faster.
Among the benefits of consolidating debt into a BMO Personal Line of Credit:
- Control expenses with a low interest rate that can help reduce the amount of interest paid and free up cash flow. Until January 31st customers who transfer $5,000 or more to a BMO Bank of Montreal Line of Credit will receive a promotional rate of prime (currently 4.25%) effective until June 30, 2005
- Flexibility – pay as little as 2% or $50 of the balance or pay the entire balance off anytime
- Convenience – one application provides ongoing access to credit that can be used when, where and how you want
Findings of the BMO Survey
Question: How much did you actually spend on your holiday-related purchases?
|
REGION |
|||||||
|
Total |
BC |
AB |
SK/MB |
ON |
QC |
ATL |
|
|
Total |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
|
Less than $200 |
17% |
9% |
14% |
23% |
16% |
23% |
7% |
|
$200 to less than $500 |
31% |
31% |
27% |
32% |
23% |
43% |
33% |
|
$500 to less than $1,000 |
25% |
34% |
29% |
21% |
24% |
23% |
25% |
|
$1,000 to less than $3,000 |
20% |
17% |
24% |
20% |
25% |
9% |
31% |
|
$3,000 to less than $5,000 |
3% |
6% |
3% |
3% |
4% |
1% |
1% |
|
$5,000 or more |
2% |
1% |
1% |
1% |
3% |
1% |
2% |
|
Don't know / not stated |
2% |
2% |
3% |
1% |
5% |
<1% |
1% |
|
Estimated Average |
959 |
1,037 |
974 |
848 |
1,170 |
599 |
1,104 |
Question: Which of the following best describes the balance on all your credit cards?
|
REGION |
|||||||
|
Total |
BC |
AB |
SK/MB |
ON |
QC |
ATL |
|
|
Total |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
|
Less than $1,000 |
42% |
36% |
39% |
34% |
46% |
42% |
38% |
|
$1,000 to less than $5,000 |
24% |
32% |
23% |
28% |
21% |
20% |
25% |
|
$5,000 to less than $10,000 |
4% |
3% |
3% |
4% |
4% |
4% |
4% |
|
$10,000 to less than $20,000 |
2% |
0% |
2% |
2% |
2% |
1% |
3% |
|
$20,000 or more |
1% |
0% |
2% |
1% |
1% |
<1% |
0% |
|
Do not have credit card debt |
13% |
16% |
14% |
13% |
14% |
12% |
11% |
|
Do not have credit card |
9% |
7% |
10% |
11% |
4% |
13% |
16% |
|
Don't know / not stated |
7% |
5% |
6% |
6% |
8% |
7% |
4% |
|
Estimated Average |
2,451 |
2,075 |
2,935 |
2,762 |
2,526 |
2,242 |
2,509 |
Fun Facts:
Question: What type of holiday purchases did you spend the most on?
|
REGION |
|||||||
|
Total |
BC |
AB |
SK/MB |
ON |
QC |
ATL |
|
|
Total |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
|
Clothing |
22% |
19% |
14% |
28% |
27% |
16% |
30% |
|
Electronics |
20% |
27% |
22% |
18% |
18% |
22% |
14% |
|
Toys |
14% |
10% |
14% |
10% |
14% |
19% |
15% |
|
Entertainment/food/beverages |
13% |
8% |
19% |
13% |
11% |
17% |
6% |
|
Housewares |
8% |
8% |
7% |
7% |
6% |
10% |
7% |
|
Trips or travel |
5% |
10% |
3% |
7% |
5% |
1% |
4% |
|
Jewellery |
3% |
4% |
7% |
2% |
3% |
4% |
2% |
|
Tools |
3% |
2% |
2% |
2% |
2% |
2% |
10% |
|
Money |
2% |
1% |
2% |
0% |
2% |
2% |
3% |
|
Donation to Charity |
2% |
<1% |
4% |
1% |
3% |
1% |
0% |
|
Sporting goods/equipment |
1% |
0% |
0% |
0% |
1% |
1% |
1% |
|
Gift Certificate (unspecified) |
1% |
2% |
1% |
1% |
1% |
1% |
1% |
|
Other |
5% |
5% |
5% |
9% |
4% |
5% |
6% |
|
Don't know/not stated |
2% |
4% |
0% |
2% |
2% |
1% |
1% |
The BMO Bank of Montreal Post Christmas survey was conducted by Decima Research between January 4 and January 6, 2005 and was based on a randomly selected sample of 1,006 Canadians who made holiday expenditures. With a sample of this size, the results are considered accurate within 3 percentage points, 19 times out of 20. The margin of error will be larger within regions and for other sub-groupings of the survey population.
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