Banking Blog

Finance Blogs » Banking Blog » Bad habits or bad statistics?

Bad habits or bad statistics?

By Marcie Geffner ·
Wednesday, April 11, 2012
Posted: 6 am ET

A recent survey claims to have uncovered a shocking lack of financial literacy skills among U.S. adults. But statistics can be deceiving.

The survey found that 56 percent of U.S. adults don't have a budget, one-third don't pay all of their bills on time, 39 percent have revolving credit card debt, the same proportion have no nonretirement savings, and 25 percent of those who don't have such savings would keep such savings at home in cash if they did begin to save.

The study was released by the National Foundation for Credit Counseling, or NFCC, a consumer financial counseling agency, and the Network Branded Prepaid Card Association, an industry association of companies that issue co-branded prepaid cards.

NFCC CEO Susan Keating said in a statement that the survey "unveiled some disturbing trends, showing that a significant number of Americans are saving less, spending more and carrying credit card debt over from month to month, suggesting that the painful financial lessons of the past are quickly being forgotten."

The survey was conducted by telephone by Harris Interactive on behalf of the two organizations between March 16 and March 19, 2012. The survey interviewed 1,007 people ages 18 or older, and the results were weighted for age, sex, geographic region and race, as needed, to align the respondents with their proportions in the population.

But here's the catch: All of the respondents were identified as people who use prepaid debit cards for everyday transactions.

Consequently, the findings cannot be said to represent "Americans." Rather, they seem to suggest -- by correlation, if not causality -- that people who use prepaid debit cards have poor financial habits. That's not surprising since these cards tend to appeal to people who aren't engaged in the mainstream banking system.

What the study shows is not that U.S. consumers are woefully in need in financial literacy education, though that might in fact be the case. Rather, the study shows even well-meaning organizations can design surveys and manipulate statistics to prove whatever suits their purposes.

Follow me on Twitter: @marciegeff.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
1 Comment