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Financial literacy and consumer credit use

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  • Richard Disney
  • John Gathergood

Abstract

We survey a representative sample of UK consumers on their understanding of core ‘financial literacy’ concepts in consumer credit. We find levels of financial literacy are generally low in the population. We also find levels of financial literacy are on average actually lower among those who participate in consumer credit markets compared with those who do not. This evidence contrasts with that from previous studies on retirement planning and stock market investment which find a positive relationship between financial literacy and market participation

Suggested Citation

  • Richard Disney & John Gathergood, 2012. "Financial literacy and consumer credit use," Discussion Papers 12/01, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    • Handle: RePEc:not:notcfc:12/01
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    File URL: https://www.nottingham.ac.uk/cfcm/documents/papers/12-01.pdf
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    References listed on IDEAS

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    1. Annamaria Lusardi, 2008. "Financial Literacy: An Essential Tool for Informed Consumer Choice?," NFI Working Papers 2008-WP-13, Indiana State University, Scott College of Business, Networks Financial Institute.
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    6. van Rooij, Maarten C.J. & Lusardi, Annamaria & Alessie, Rob J.M., 2011. "Financial literacy and retirement planning in the Netherlands," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 593-608, August.
    7. Mitchell, Olivia S. & Lusardi, Annamaria (ed.), 2011. "Financial Literacy: Implications for Retirement Security and the Financial Marketplace," OUP Catalogue, Oxford University Press, number 9780199696819.
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    Cited by:

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    2. Kourosh Shafi, 2021. "Investors’ evaluation criteria in equity crowdfunding," Small Business Economics, Springer, vol. 56(1), pages 3-37, January.

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    Keywords

    financial literacy; consumer credit;

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