Women Pay More for Credit Cards: Study

April 24, 2012 — -- Women pay more for their credit cards than men do. (And that's a double whammy, because we also shop more than men do!) A FINRA Foundation Study found that, on average, we gals pay a half a point higher interest rate on our cards than the guys do. And that's after factoring in things like income level, education -- even financial literacy.

And there's more discouraging news. Women were:

5 percentage points more likely to carry a credit card balance.

4 percentage points more likely to make only the minimum payment.

6 points more likely to be charged a late fee.

Now the good news: among financially literate men and women these last three stats disappeared. Men and women were equal.

"For women, having a high level of financial literacy appears to pay off," said FINRA Foundation President Gerri Walsh. "Becoming more financially literate is a great step that any woman can take to keep more of her hard-earned money in her pocket."

Whether you're a man OR a woman, I can help make you more credit-card-literate. This is key because credit is one of the top things we spend money on. People don't usually think of it that way, but credit absolutely has a cost, and that cost is the interest rate. Raise your credit score and you will lower your interest rate. Lowering your credit card interest rate can save you hundreds of thousands of dollars over your lifetime. Here are the "Dos" and "Don'ts" of maintaining a high credit score.

DO:

Pay down debt. If you have the funds, this is the single fastest way to raise your credit score. It doesn't make sense to have credit card debt AND a savings account. Use your savings to pay the debt. Use your card if you have an emergency.

Pay on time. Payment history makes up 35 percent of your credit score. If your life is chaotic and you're at risk of paying late, set up auto payments.

Keep your ratio low. Huh? I'm referring to your credit utilization ratio -- the amount of debt you have versus the amount of credit you have. This is tough, but for the best possible credit score, you should charge up no more than ten percent of your credit cards' limit.

Apply for a secured credit card. This is a way for younger people with "thin" credit files to show that they can handle credit responsibly.

DON'T:

Apply for multiple cards at once. The FICO scoring model marks people down who apply for a bunch of credit, because statistics show people who do that are more likely to default.

Close existing accounts. The more credit you have, the better your credit utilization ratio. Closing longstanding accounts is even more harmful because "length of credit history" makes up 15 percent of your score.

Co-sign loans. If the person you co-sign for makes a late payment, that blemish ends up on YOUR credit report.

Ignore small balances. The Classic FICO scoring model, which many businesses still use, holds late payments and collections against you no matter their size.