Credit Card Debt and Gender Differences

Credit Card Debt and Gender Differences

To quote from the 1996 film The Nutty Professor starring Eddie Murphy, “Women be shopping!” And that is a very common and accepted stereotype, the implication being that women shop nonstop or uncontrollably. But here is the thing; men shop too! So, I got to wondering, are there gender differences when it comes to the spending habits of men and women?

There have always been comparisons of the similarities and differences between men and women; from driving, to parenting, to employment, to spending habits, the list is long and varied. With the current credit crisis in America, I thought it would be interesting to delve into the differences in credit card usage between the sexes. So, I wondered, are there differences between men and women when it comes to credit card usage and debt? Who spends more, who carries more debt, and who takes longer to pay it off? This article plans to dive deep into all those questions and more.

Which sex holds more credit card debt?

In 2019, men held an average credit card debt amount of $7407.00 and women held an average credit card debt amount of $5245.00, about a 22% difference.

The short and sweet answer is as the chart above demonstratively depicts that men clearly, sorry guys, carry higher amounts of credit card debt overall than the ladies. So, I am assuming that this little tidbit of statistical information helps dispels that old line of thinking that women are constantly shopping. Obviously both genders like to shop!

Is credit card debt on the rise?

A survey in 2019 concluded that nearly 55% of all Americans of having at least one credit card and carry some amount of credit card debt. And as reported on the website Military.com, Americans, on average, have 3.7 credit cards and carry approximately $5600 of debt on them. And in actuality, according to a survey conducted by Experian, reported by Marketwatch, women hold more open credit cards, 3.7, than men, 3.

 Another story posted on npr.org stated that the American consumers’ combined credit card debt had hit an all-time high, totally $1 trillion dollars! But is credit card debt on the rise? Yes! Now let’s look at some of the figures.

As this graph shows, credit card debt is definitely on the rise. In 2013 the outstanding revolving debt was $825 billion building and it has steadily increased to over $1 trillion in 2018. Sadly, it is not showing any sign of slowing down or stopping.

Are there any gender differences in types of purchases?

Yes, there are some differences to the types of purchases that men and women make. According to the website Value Penguin, men tend to take out the plastic for larger, more expensive type purchases whereas women will charge smaller, more less expensive type items.

The folks over at Genysis Credit Union reported that there are some definite patterns of spending and the types of spending when it comes to sexes. For example, single men outspent women on food and alcohol. However, when it came to buy clothes, women outspent men. Men spend more on automobile costs than women; yet, women spend more on their pets.

When looking at the category of entertainment, men spent more than women on “audio and visual equipment and services” whereas women spent more than men on items that fall into the home entertainment category.

This idea that men tend to shop for more “heavy duty” items such as electronics or furniture, as compared to women who shopped for things like groceries and clothing was also cited by Optinmonster.

Are there any gender differences in credit card payment amounts, fees or charges?

According to a survey conducted by FINRA (Financial Industry Regulator Advisory), as reported on Military.com, 60% of the women surveyed were more like to carry debt on their open credit cards as opposed to just 55% of men. In addition to that, the survey found that 42% of women and 38% of men tended to make only the minimum payment required on their credit cards.

In addition, the survey revealed that women (29% and 16%) were more likely than men (23% and 15%) to be charged with fees associated with making a payment late or exceeding their spending limits, respectively. On a positive note, for the ladies at least, the survey found that men were more likely to use their credit cards for cash advances, 15% for men compared to 12% for women.

Finally, the survey found that men (45%) paid off their credit card balance each month in full, while only 39% of women did so. The survey also found that men (37%) tended to do more comparative shopping for credit cards than women (31%).

Who spends more time shopping online, men or women?

As seen on the website Adglow, between the ages of 25 to 49, men spend more time shopping online than women, 84.3% to 77% respectively. Two more interesting facts that came out of this study were that although men spend more time online shopping than women, women actually buy more often than men. However, the coin flips once again as men spend more per purchase than women. Now the statistics that I just reported need to be taken with a grain of salt as the survey was conducted in Europe. So, what about in the U.S.?

According to Optinmonster, 69% of the American population has shopped online! In conjunction with that, 25% shop online at least once a month. Now here is a reversal from the European study, in the United States, online shoppers are comprised primarily of women, 72% as compared to 68% for men.

Online shopping is not likely to disappear anytime soon. In fact, Optinmonster is forecasting that by 2023 91% of the U.S. population or 300 million people will be online shoppers! As that trend continues, only time will tell if the how men and women shop online will become more similar or will the gender gap continue to divide.

Credit Card Debt and Death

Credit Card Debt and Death

What happens to my credit card debt when I die?

Consider the old adage that states, there are only two things certain in this life, death and taxes. Death and taxes, what a peculiar combination. As reported on the website debt.org, a survey in 2016 concluded that nearly 73% of all Americas would die in debt. But what does this mean or how does this apply to a person’s credit card debt when they pass on to the great beyond? I would think that death, being the final release, would relieve a person from their earthly obligations and responsibilities. Wouldn’t it? Let’s explore that in a little more depth and find out together.

According to the website, The Balance, when a person dies, the debt that they have accumulated during their lifetime passes onto their estate, which will then settle that outstanding debt. This debt can include such things as credit cards, car loans, and/or mortgages just to name a few. So what is an estate? What does that mean? Great questions! Keep on reading because the next section deals with those very questions.

What is my estate?

When most people hear the word ‘estate’, they instantly get a mental image of a grand house surrounded by sprawling green lawns, a large swimming pool, on a very large parcel of land. And true, that is one meaning of the word; however, that is not what we are discussing here.

As reported by the website Investopedia, “an estate is everything comprising the net worth of an individual, including all land and real estate, possessions, financial securities, cash, and other assets that the individual owns or has a controlling interest in.”

Most people will only consider the big-ticket items, as mentioned earlier, when visualizing an estate; however, it is not limited to just those items. A person’s estate can truly comprise of anything at all of value. Things such as works of art, a stamp collection, collectible plates, or jewelry, as mentioned over at debt.org, to name a few more, less commonly thought of items as making up a person’s estate.

Who is responsible for paying my debts after death?

The unfortunate reality being, is that death does not resolve you of your financial obligations. When you die, someone will be responsible for clearing the debt you had accumulated at the time of your passing. The responsibility of taking care of your remaining debts falls to your estate and more specifically the executor (or executrix if the person is female) of your estate. The executor (or executrix), as defined by the website Investopedia, is “an individual appointed to administer the estate of a deceased person… whose main duty is to carry out the instructions to manage the affairs and wishes of the deceased person’s estate.”

Bear in mind, though, that not all assets may be sold to pay off a decedent’s debt. The website debt.org reports that assets are broken down into two classifications, exempt and non-exempt. This means, legally, that items classified as exempt cannot be sold to cover any lingering debt. Obviously, each State classifies what is on the exempt and non-exempt list differently, save two very distinct matters. Every State considers life insurance policies and retirement savings as exempt. This naturally leads to the question then of who actually pays for the deceased’s debt.

In most situations, that is the executor’s (executrix’s) job. Additionally, in most cases, relatives are not responsible for the late individual’s debt apart from some very specific circumstances. The U.S. News website lists the follow scenarios as to when a relative may still be responsible for a deceased relative’s debt. Those scenarios include if the relative(s) have co-signed for a credit card or loan, owned a business or property jointly, if they live in any of the nine community property states, or is required by state law.

What types of debt will my estate pay?

There are plenty types of debts that can be considered for collection after a person dies. As reported on the website, The Balance, these debts are placed in a priority order. Some of the types of debts that are set to be settled after a debt include loans, such as, car, home, student, and personal. This can include debts that have co-signers as well. So where does credit card debt rank on that priority list? Honestly, credit card debt ranks pretty low as to priority, which could account for why those types of debt routinely get sold to third-party collection agencies.

How should I plan for settling my debt when I die?

There are many options available to one who is wanting to make sure that any unsettle debt is taken care of in the event of their demise. The first thing to do is to make sure that an up-to-date and accurate will is drawn up. A will is a legal document outlining the decedent’s wishes as to the handling and dispersion of their estate. It not only outlines which relatives get which assets; it also outlines how any unsettle debt is to be resolved. Then the executor (or executrix) deals with any creditors or entities looking for payment.

Another common way is to have some type of life insurance product purchased by the deceased, while living, that can be used to settle many of their final expenses. Remember all assets that you have put in place to resolve your final debts are classified as exempt or non-exempt. As you will remember assets classified as exempt (life insurance policies) cannot be used to pay off creditors in most cases. Hopefully, the will or, at least, the deceased’s final wishes will be followed through by having the beneficiaries use the policies benefit to pay off certain final expenses such as funeral costs and whatnot.

What happens if debt collectors contact my survivors?

As much as we would like this process of settling an estate to be straightforward, often times, it is not. In fact, it can be, and usually is, downright confusing and frustrating. Part of the frustration and confusion arises from the question of what happens when the estate does not have enough value or assets to cover the decedent’s debts. Who is on the hook for the bill when creditors come knocking?

As stated before, the estate and executor (executrix) are responsible for dealing with creditors and paying off the decedent’s debt. There are some situations where other people may still be liable, such as a co-signor on a mortgage or credit card. But what if you are not a co-signor to any of the debt and bill collectors start contacting you regardless?

According to the website debt.org, creditors have a specific time-frame to make a claim to an estate so as to get paid. This time-frame is determined by each state separately. Unfortunately, like other situations where debt collectors are involved, they will try to get the money, many times regardless of whether you owe it or not. Just remember, that the Fair Debt Collections Practices Act afford the surviving relatives or the executor (executrix) of the estate the same protections as individual consumer. Don’t be afraid to exercise your rights if you are being harassed.