According to data from the 2012 National Household Survey, 819,885 newcomers have arrived in Canada in the last three years. They often come from countries where the concept of credit is different from ours, or where credit is non-existent.
During the first days or weeks of their arrival, these people are exposed to advertisements and credit offers designed specifically for them. They are given information about the Canadian banking system, offered an account in a financial institution and suggested a credit product (usually a credit card); this, it is claimed, helps build a good credit record.
For this clientele, access to credit is easy. It's not uncommon for a newcomer to be able to obtain a credit card without having to provide any information about his or her credit history. Our study shows that, while advertisements and offers are tempting, they contain little (if any) objective information and are difficult to understand (if not downright incomprehensible) for newcomers.
They could turn to an aid organization, but as they generally acquire credit products during the first few weeks of their arrival, they don't have the time. They then have only their relatives and financial institutions to turn to for information.
As a result, they often buy credit products without understanding the ins and outs. We believe it's important for organizations whose mandate is not to sell financial products to be able to reach newcomers before they acquire credit products. This would enable them to learn in good time about the advantages, as well as the disadvantages and risks, of these products.
