Canadians need help with debt: Poll

Almost half (49%) of debt-laden Canadians made at least one extra payment to bring down their balances last year, finds a new CIBC Poll.

Still, most households fail to seek professional advice on proper debt management, says Christina Kramer, executive vice president of retail distribution and channel strategy at CIBC.

“Canadians are more likely to seek financial advice about saving for retirement than about managing their debt,” she says. “To achieve significant debt reduction, people must make extra payments and reduce interest costs first.”

Read: Canadians in Denial on Lasting Debt

Other key findings:

• 72% of Canadians hold some form of debt. A June 2011 CIBC poll reported the same number. • Canadians who make extra payments focus most on reducing credit card balances (62%), line of credit balances (46%), and mortgages (22%); • Age groups most likely to hold debt are 25-34 year olds (84%) and 35-44 year olds (83%); • Regionally, Atlantic Canadians were among the most likely to hold debt (78%), while Ontarians were among the least likely (69%).

Read: Own Your Clients’ Debt

Kramer says the following tips will help clients reduce debt:

• Make lump sum payments to higher-interest debt first. • Minimize overall interest costs by utilizing debt products with lower interest rates, and by having a strategy to pay balances down in specific time frames. • Tell clients to consider the benefits of making small adjustments to their current payments. Interest rates are low, but they can still save over the long term by increasing payments and reducing interest.

Read: What Debt Issue?