A New Survey Finds U.S. Citizens Aren’t the Brightest When It Comes to Money
U.S. citizens lag behind their international peers when it comes to understanding money.
The United States has the largest economy in the world. Its citizens’ financial literacy doesn’t match up to their country’s fiscal muscle.
According to an S&P survey, the first of its kind, only 57 percent of U.S. citizens are financially literate or have an understanding of basic financial concepts. That ranks Americans 14th in the world, behind the likes of citizens from Australia, Canada, the United Kingdom, Israel, Finland, and Germany.
The survey was conducted by Gallup and analyzed by researchers from the World Bank and the Global Financial Literacy Excellence Center at George Washington University. In polling more than 150,000 adults across 148 countries, the study also revealed a gender gap in the United States of financial understanding.
Around the world, there’s a 5 percent difference in financial literacy between men and women. In the United States, it’s double that, with 62 percent of men testing financially literate, compared to 52 percent of women.
U.S. citizens are also chronic borrowers who don’t understand interest. Some 60 percent of American adults have a credit card. But of those who use credit for purchases, 43 percent don’t understand that interest builds up if the card isn’t paid in full. About a third of Americans who used a loan to purchase a home don’t understand the cost of borrowing either.
If there’s any solace in the survey, U.S. citizens aren’t totally alone in basic misunderstandings on financial matters. Worldwide, two out of three adults have low financial literacy.
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