In Our Best Interest: Women, Financial Literacy, and Credit Card Behavior

Mottola, Gary R.

doi:10.5038/1936-4660.6.2.4

Cited by 137 publications

(104 citation statements)

References 16 publications

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“…Third, consistent with other studies that document the effects of financial literacy on debt behavior (Lusardi and Tufano, 2009a,b;Allgood and Walstad, 2012;Mottola, 2012;and Disney and Gathergood, 2012), we find that numeracy and knowledge of basic financial concepts is strongly negatively correlated with high-cost borrowing, even after accounting for age, income, education, and many other variables that can proxy for financial vulnerability and being hit by shocks.…”

Section: Introductionsupporting

confidence: 90%

Financial Literacy and High-Cost Borrowing in the United States

Lusardi

Scheresberg

2013

118

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In this paper, we examine high-cost methods of borrowing in the United States, such as payday loans, pawn shops, auto title loans, refund anticipation loans, and rent-to-own shops, and offer a portrait of borrowers who use these methods. Considering a representative sample of more than 26,000 respondents, we find that about one in four Americans has used one of these methods in the past five years. Moreover, many young adults engage in high-cost borrowing: 34 percent of young respondents (aged 18-34) and 43 percent of young respondents with a high school degree have used one of these methods. Using well-tested questions to measure financial literacy, we document that most high-cost borrowers display very low levels of financial literacy, i.e., they lack numeracy and do not possess knowledge of basic financial concepts. Most importantly, we find that those who are more financially literate are much less likely to have engaged in high-cost borrowing. Our empirical work shows that it is not only the shocks inflicted by the financial crisis or the structure of the financial system but that the level of financial literacy also plays a role in explaining why so many individuals have made use of high-cost borrowing methods.

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Section: Introductionsupporting

confidence: 90%

Financial Literacy and High-Cost Borrowing in the United States

Lusardi

Scheresberg

2013

118

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“…The authors also show that the influence of self-assessed financial literacy on costly credit card practices is greater than that of test-based financial literacy, providing evidence that the two concepts are distinct from each other. 35 Analyzing the same dataset, Mottola (2013) also confirms that the financially literate respondents are less often found to exhibit costly credit card behaviors such as being charged a late fee for late payment or not paying down credit card debt in full. In addition, some studies show that a lack of financial literacy is associated with excessive debt accumulation (e.g., Stango and Zinman 2009;Lusardi and Tufano 2015).…”

Section: Costly Credit Card Practices and Excessive Debt Accumulationmentioning

confidence: 80%

“…Another robust finding across many countries is a gender gap with respect to financial literacy (Lusardi and Mitchell 2009;Tufano 2009, 2015;Lusardi et al 2010;Hung et al 2009;Mottola 2013;Bucher-Koenen et al 2016;Harrison 2015, Klapper et al 2015): men usually score higher on measured financial literacy than women. Two channels have been found to drive this result.…”

Section: Gendermentioning

confidence: 99%

“…Other recent studies document that individuals with low levels of financial literacy are significantly less likely to use their credit cards efficiently (e.g., Lusardi and Tufano 2015;Mottola 2013;Allgood and Walstad 2013). Analyzing U.S. adults, Allgood and Walstad (2013) find a robust negative relation between financial literacy and costly credit card practices.…”

Section: Costly Credit Card Practices and Excessive Debt Accumulationmentioning

confidence: 99%

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Financial literacy, financial advice, and financial behavior

2017

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In this survey, we review the voluminous body of literature on the measurement and the determinants of financial literacy. Wherever possible, we supplement existing findings with recent descriptive evidence of German households' financial literacy levels based on the novel Panel on Household Finances dataset, a large-scale survey administered by the Deutsche Bundesbank and representative of the financial situation of households in Germany. Prior research not only documents generally low levels of financial literacy but also finds large heterogeneity in financial literacy across the population, suggesting that economically vulnerable groups are placed at further disadvantage by their lack of financial knowledge. In addition, we assess the literature evaluating financial education as a means to improve financial literacy and financial behavior. Our survey suggests that the evidence with respect to the effectiveness of the programs is rather disappointing. We also review the role of individuals' financial literacy for the use of professional financial advice and assess whether expert intervention can serve as a substitute to financial literacy. We conclude by discussing several directions for future research.

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“…While the increased participation of women in higher education brings with it the promise of better economic welfare, the issue of women's ability in money management and financial behvaiour remains a concern due to women's low level of financial literacy (Lusardi & Mitchell, 2011;Mottola, 2013), their lower financial management skills (Hung, Yoong, & Brown, 2012) and their negative attitude toward money (Borden, Lee, Serido, & Collins, 2008). These gender differences in principal financial skills may result in differences in financial behaviour between the two genders and in differences in money management and levels of financial wellbeing between male and female college students.…”

Section: Introductionmentioning

confidence: 99%

An Exploratory Study of Personal Financial Wellbeing Determinants: Examining the Moderating Effect of Gender

Falahati¹,

Sabri²

2015

ASS

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Financial educators have placed importance on the study of the determinants of financial wellbeing for some decades now. The subject of the research has comprised factors such as marital status, employment status, education, income and health, which impact on financial wellbeing. However, there is as yet, a lack of research on the perceived influence of differences in financial wellbeing between the genders, particularly within the Asian context. The present research evaluates the moderating effect of gender on the determinants of financial wellbeing among college students in Malaysia. Samples for this study comprised students in Malaysian universities. The multi stage stratified random sampling technique was utilized to select the respondents, while self-administered questionnaires were used to collect the data. Further, a multi-group analysis approach using AMOS was used in studying the influence of gender on financial wellbeing. The findings of the present research show that among college students, gender has a substantial moderating effect on the factors related to financial wellbeing.

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In Our Best Interest: Women, Financial Literacy, and Credit Card Behavior

Cited by 137 publications

References 16 publications

Financial Literacy and High-Cost Borrowing in the United States

Financial Literacy and High-Cost Borrowing in the United States

Financial literacy, financial advice, and financial behavior

An Exploratory Study of Personal Financial Wellbeing Determinants: Examining the Moderating Effect of Gender

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