Albertans have highest debt, worry less about interest: survey NICOLE BERGOT

Albertans fuss more over debt than the interest on it, a new poll shows.

But as they age, interest becomes more of a concern, says the debt awareness survey, a Leger poll of 1,517 Canadians sponsored by Credit Canada.

Half of Albertans polled said debt principal is more worrisome than the interest.

Albertans continue to carry the highest average consumer debt in the country — excluding mortgage debt — at $28,155, the survey found.

Other highlights from Alberta respondents include:

■ 71 per cent of Albertans are aware

of their total debt (versus 65 per cent nationally).

46 per cent know the interest rate

■

on their debt.

39 per cent know the amount they

■

are paying in monthly interest.

46 per cent of Albertans know

how ■ long it will take to pay off their debts with fixed payments (versus 34 per cent nationally);

28 per cent know how long it

■

will take to pay off their debts with minimum payments.

Across the country, those over age 65 are most likely to know their total debt (75 per cent), the interest rate on their debts (55 per cent) and their monthly interest payments (45 per cent).

Debt repayment awareness, however, is low across the board, with one in three respondents knowing “how long it will take to pay off their debts making fixed payments.”

“While millennials ranked the lowest when it came to knowing how much debt they owe and how much interest they’re paying, overall awareness is low across the board among all ages, which is alarming to say the least,” said Laurie Campbell, Credit Canada CEO, in a Wednesday release.

The “snowball” method of repayment involves paying the smallest debts first regardless of the interest rate and can keep people on track; the “avalanche” method takes aim at debt with the highest interest rate first, which can save money in the long run. Credit Canada has launched a “snowball versus avalanche” debt calculator to help people figure out their best repayment method.

A study by the Journal of Consumer Research suggests the snowball method is more likely to succeed because of instant gratification related to paying off a debt balance faster.

Leger conducted the survey between July 27 and July 31, using its online panel, LegerWeb. A probability sample of the same size would yield a margin of error of plus or minus 2.5 per cent, 19 times out of 20. Leger’s online panel has approximately 475,000 members nationally, with between 10,000 and 20,000 new members added each month and has a retention rate of 90 per cent.

Credit Canada is a non-profit and charitable organization providing free and confidential credit counselling, personal debt consolidation and resolutions.