Does Responsibility for Financial Tasks Influence Credit Knowledge and Behavior?: Evidence from a Panel of US Couples

Managing financial matters, an important household task, is often handled by one partner. The decisions executed by the household financial manager have important implications for household financial well-being. The division of responsibility contributes to the accumulation of financial knowledge and experiences that build financial capability. Using unique panel data from the Survey of Consumer Payment Choice, this study examines who couples choose to manage household finances and how the division of financial responsibility influences credit knowledge and behavior. We find that partners who earn more are more likely to be responsible for managing savings and investments as well as paying monthly bills controlling for individual- and household-level fixed characteristics, like ability. We also find that the partner who defers responsibility for savings and investing is less likely to know their credit rating. This finding holds when controlling for measured financial literacy. We do not find evidence that deferring financial responsibility is associated with estimated credit score nor credit card repayment behavior.