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7 ways the sexes handle credit differently

Gender does bend spending and borrowing behavior, studies say

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Think men and women whip out their credit cards for different reasons? What about debt repayment ---- are there behavior variances between the sexes? As with height, we are more alike than not. Still, as with those remaining couple of inches where males are just slightly taller, there are a few fascinating differentials among the genders regarding credit.

Do men and women charge alike?

1. Charging habits
On the whole, men and women carry roughly the same load of consumer debt. However, a disparity begins to emerge when some men start seeking a partner. According to the 2008 findings reported in the academic journal Evolutionary Psychology, "males who are relatively higher in mating effort may have a greater tendency to maximize their display of economic power, saving little and even spending beyond their capacity through the use of credit." In other words, the desire to attract a member of the opposite sex can influence a man to lay down the plastic a little more frequently than perhaps is best for his own financial health. 

And what about business owners -- do male and female entrepreneurs use credit in the same way to finance their company's needs? Not really, according to a 2002 study by Federal Reserve economists Alicia Robb and John Wolken. They found that women business owners were significantly more prone to borrow using credit cards than their male counterparts. Male-owned firms, on the other hand, used trade credit -- buying supplies and services from another business with "pay later" agreements -- and paid after the due date with greater frequency than female-owned firms.

2. Number and type of credit accounts
Interestingly, men are more apt to have car loans, mortgages and other types of installment accounts, while women hold a greater number of bank cards and use them more frequently, reported a 2006 study on the subject by Experian's Score Index. The report also indicated that women had somewhat more credit inquiries than men.

Why the discrepancy with the amount of credit cards? Many times it's a practical issue -- when men and women couple up, it's often the woman who has greater reign over the family's household finances and therefore makes more purchasing choices. In short, a woman may need and use credit simply because she's out shopping more often.

3. Paying for medical care
Gender differences in credit behavior emerge even at the doctor's office and hospital. A 2008 survey conducted by The Guardian Life Insurance Company of America revealed that men are far more likely than women to charge major medical recovery expenses. According to the study, one out of five Americans who had direct experience with a critical illness used a credit card to pay for their recovery related expenses. However,  it also found that males are twice as likely as females to have done so: 30 percent of men charged critical illness recovery expenses as opposed to just 14 percent of women. Although financing such medical care is an option, it is usually better to request an interest-free payment plan with the hospital or physician. They can only say no, and frequently say yes.

4. Credit card offers
In CreditCards.com's June 2008 "Taking Charge" survey, a significant difference between the sexes became apparent regarding how credit card offers received in the mail are disposed of. The results showed that women are considerably more likely than men to shred their credit card offers (55 percent versus 43 percent), while men are more likely to throw them in the garbage (34 percent versus 25 percent). The results don't surprise financial planners and credit counselors, who say it mirrors what they see among their clients: Women tend to be more conservative and men less cautious. Dvorkin explains the different approaches as women more conscious of "doing the right thing" with the credit card offers, while "the guy is just going to rip it up and hope nobody goes through the garbage can."

5. Help: Who gets it and when
Both sexes get into their fair share of credit trouble, but when it comes to reaching out for help when balances swell, it's most often women who seek assistance. "Guys tend to have more debt bravado than their female counterparts and tend to put off getting help with their debt," says Ken Clark, a Little Rock, Ark., financial planner and psychotherapist who specializes in helping partners see eye-to-eye on financial matters. He's found that women greatly favor counseling whereas men try to keep it private and get second jobs to resolve it on their own.

Clark also notes that men tend to be less aware of their account details -- from their cards' APRs to even what their payment is. "In general," Clark says, "women are a bit more detail oriented. They'll be the first to make a budget, especially when they are anxious about their balances."

6. Credit communication
Whether assets or liabilities, many couples aren't always forthright about what they have or how much they owe. Regarding credit card activity, though, Dvorkin finds women to be generally more open and expressive. A woman will talk about her financial issues more readily and openly, while a man is more apt to hold back information and, asserts Dvorkin, "stick his head in the ground like an ostrich" once trouble begins to brew.

7. Bankruptcy
When debt problems reach the point of no place left to turn, women are more likely than men to take the legal route out. The U.S. Department of Justice Trustees Office reports that among those who file for Chapter 7 bankruptcy, credit card debt is higher for males in debt than females by a few thousand dollars. This higher debt load before pulling the bankruptcy trigger support Dvorkin's assertion that, "Men only file if they have to, in an emergency, while women look it as is as a solution sooner in the process."

Ultimately, the two genders share most of the same credit habits, both good and bad. Yet there are differences as well, and acknowledging them can help in mutual understanding. If you're in a relationship with someone of the opposite sex, talk about opposing approaches to consumer borrowing issues, including the best use of credit and what to do if problems surface. It's time to lay your cards on the table.

See related: Poll: Snooping and arguments go along with joint credit, Poll: Credit card debt the new taboo topic, Don't say I do to bad credit, 12 debt questions to ask your betrothed

Published: February 4, 2009


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