Gender and Credit Card Habits: It’s Not Personal


Ever wonder how women and men manage their credit cards, and if there are any specific habits that one gender does more than the other?

Well, there was a survey released about three weeks ago, which revealed that women pay higher interest rates on credit cards than men.

The Financial Industry Regulatory Authority (FINRA) Foundation said females tend to pay an interest rate that is a half of a percentage higher than men, regardless of financial literacy levels.

Women Pay Higher Interest Rates on Credit Cards

credit card rates

As you can see from the image above, women were stuck paying an interest rate of around 15%, versus men who paid a rate of just 14.5%.

And if financial literacy is high, the spread widens even more.

While it may seem inconsequential, over time, it could amount of hundreds or even thousands of dollars, depending on the size of the balance carried.

But why? Why would women be subjected to a higher interest rate on their credit card(s)?

I may get some flack for saying this, but my guess is that women may be more likely to take out store credit cards while shopping, which are notorious for having the highest interest rates.

You know the type, which are sold at the register to save you an extra “20% off” of your purchase. While it may sound like a good deal at the time, these deals are intended to be big money makers for the credit card issuers.

They essentially hope you’ll carry a balance and pay the sky-high credit card finance charges each month.

Women More Likely to Carry Credit Card Balances


And guess what. The survey also found that 60% of women carried a credit card balance, versus only 55% of men. So these store credit cards are clearly a moneymaker.

To make matters worse, 42% of women admitted to only making the minimum payment, while only 38% of males engaged in that bad behavior.

This is the perfect setup for such credit cards; an ongoing balance where the cardholder only makes the minimum payment. Cha-ching!

To add insult to injury, 29% of women were hit with late fees, compared to just 23% of men.

Men More Likely to Take Out a Cash Advance

While it sounds like we’re beating up on women here, men did fall short in one category.

They were more likely to take out a costly credit card cash advances, with 15% of men admitting to engaging in the practice versus 12% of women.

Cash advances are definitely bad news because they accrue interest immediately and have the highest credit card APR. So please avoid at all costs!

But men won again, with 45% paying their credit card balances in full, versus just 31% of women.

Finally, both men and women failed when it came to shopping around for a credit card.

Just 37% of men and 31% of women comparison-shopped for credit cards. Everyone should shop around, at least for 10-15 minutes, to see the deals that are available.

Otherwise, you could be throwing money away or missing out on lucrative awards.

(photo: tnarik)

By Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.

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