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The gendering of credit cards

By Janna Herron ·
Monday, April 23, 2012
Posted: 4 pm ET

Women have an unhealthier relationship with their plastic than the men in their lives, a new study has found. But the difference disappears when women become financially educated.

Three out of 5 women carry a balance on their credit cards, according to a study from FINRA Investor Education Foundation, compared with 55 percent of men.

A higher percentage of women paid just the minimum, incurred late and over-the-limit fees and took out cash advances from their credit cards than men, the study found. More men paid their balances in full or compared credit cards before applying than the ladies.

The difference between the sexes in each category was relatively modest -- anywhere from a percentage point to 6 -- but it added up and not in a woman's favor.

What evened out the odds, though, was financial literacy, the study said. Twenty-four percent of women with good financial understanding engaged in two or more costly credit card behaviors, the same percentage as men with high financial literacy.

But when the sexes have low financial literacy, 32 percent of women engage in two or more costly behaviors, compared with 29 percent of men.

What financial literacy doesn't create is interest rate equality. Women pay a higher APR, no matter what. Female cardholders with high financial literacy on average have a 14.7 percent interest rate, versus 14.1 percent for men of the same literacy level. Female cardholders with low financial literacy pay a 15 percent APR, while their male counterparts pay only 14.5 percent.

The study didn't hypothesize why this difference exists, but did say it can be an expensive one.

"Over the course of a lifetime, a female consumer could pay hundreds or thousands of dollars more in borrowing costs relative to a male with the same demographic characteristics," the study concluded.

Ladies (and gentlemen), that's a good reason to pay off your credit card balance in full every month.

What do you think about gender and credit cards?

Follow me on Twitter: @JannaHerron.

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April 25, 2012 at 9:56 am

Of course women carry a balance on their cards. Men are paid higher for the same job.
April 24, 2012 at 1:08 am

very confusing issue to say the least