FINRA Foundation Study Finds Most Women Pay More When Using Credit Cards

WASHINGTON — The FINRA Investor Education Foundation released a new study revealing that women were more likely to engage in costly credit card behaviors than men. Overall, women were five percentage points more likely to carry a balance, four points more likely to pay the minimum payment on their cards and six points more likely to be charged a late fee. The new study, In Our Best Interest: Women, Financial Literacy and Credit Card Behavior, is based on data from the 2009 National Financial Capability Study, an online survey of more than 28,000 respondents (approximately 500 per state, plus D.C.).

The study findings suggest that financial literacy can play a key role in helping women avoid costly credit card behavior. Twenty-nine percent of men with low levels of financial literacy are likely to engage in problematic credit card behaviors, compared to 32 percent for women with low financial literacy—and this difference is after accounting for the effects of important demographic characteristics like age, education and income. Importantly, however, there were no differences in behavior between men and women with high financial literacy.

"For women, having a high level of financial literacy appears to pay off," said FINRA Foundation President Gerri Walsh. "The gender gap for costly credit card behaviors disappears for women with high levels of financial literacy, and after controlling for demographic characteristics like age and income. Becoming more financially literate is a great step that any woman can take to keep more of her hard-earned money in her pocket."

Somewhat surprisingly, In Our Best Interest also found that women pay about half a percentage point more in credit card interest rates than men, regardless of financial literacy level and after accounting for other demographic characteristics like income and education.

The sample used in this study was weighted to match the adult U.S. population (age 18 and up) on age by gender, ethnicity, education and census division. Data from the U.S. Census Bureau's 2008 American Community Survey were used to construct the weights. However, as in all survey research, there are possible sources of error – such as coverage, non-response and measurement error – that could affect the results.

The FINRA Investor Education Foundation is the largest foundation in the United States dedicated to investor education. Its mission is to provide investors with high-quality, easily accessible information and tools to better understand the markets and the basic principles of saving and investing.