Vote 2020 graphic
Everything you need to know about and expect during
the most important election of our lifetimes

It Costs More To Be A Financially-Illiterate Woman Than A Man

Illustration for article titled It Costs More To Be A Financially-Illiterate Woman Than A Man

A survey by FINRA, the largest independent securities regulator in the US, has found that, overall, women pay higher interest rates on credit cards than men by .5%. The half a point may look small, but means that over the course of a lifetime, women could be paying as much as thousands of dollars more to borrow money than men do.

Advertisement

Additionally, women with low levels of financial literacy are more vulnerable to credit card mismanagement than men with the same back-asswards knowledge of personal budgeting—specifically, they are more likely to pay only the minimum, carry over a debt, incur late fees and comparison shop for more cost-effective or realistic credit cards. You can check this infographic for more explicit, if facepalm-worthy, details.

One explanation of this could be the simple reality of gender-pricing, a term employed to indicate the heightened cost of many day-to-day or essential women's products and services (from dry-cleaning to health insurance to shampoo).

Advertisement

But for the financially literate, it evens out, and the gap disappears. FINRA estimates that an increased rate of financial literacy would improve women's credit card behavior by 60%, not to mention encouraging savings and retirement planning. So, well, shit. Those of you who don't understand your own credit, get on it. Especially you singles, since we're already fucked as it is.

'See The Hidden Costs Of Being A Woman' [Business Insider]

Image via dean bertoncelj/Shutterstock

Share This Story

Get our newsletter

DISCUSSION

ruby-s-chard
ruby.s.chard

I wonder if they controlled for income, savings, cash flow, financial stability, expenses, financial dependents, etc. when they looked at propensity to pay extra fees and make the minimum payment on their card. I would expect credit literacy to correlate strongly with income. Given gender pricing on everything, women are more likely to be in poverty, and women are more likely than men to have primary responsibility for their dependents, it's probable that women and men who have equally bad understanding of credit are in entirely different financial situations. Charge financially illiterate dude 10% more on just about everything he buys, cut his pay 20%, and give him primary custody of his kid, and I bet the gender gap in bad credit behavior among low credit literacy people would disappear. (This wouldn't affect sexist interest rates, though.)

The infographic is framing the outcome like it's a knowledge gap and that women just do dumb things, despite their claim to be comparing equivalently low credit literacy men and women. If low credit literacy women are under considerably more financial strain than low credit literacy men, then no shit they're more likely to miss payments, make late payments, pay only the minimum balance, etc. They're having a tougher time making ends meet.