Credit-Card Use Predicts Financial Acumen

Staten Island business bank cites findings in economists' revealing survey


STATEN ISLAND, N.Y. – People who think they are pretty savvy about how they use credit cards likely are also astute about other financial matters, like investments, retirement planning and decisions on mortgages.

Victory State Bank, Staten Island's only community-based commercial bank, says survey findings pointing to this conclusion regarding self-confidence can be instructive.

Two University of Nebraska-Lincoln economists surveyed some 27,500 credit-card users nationwide to find out how much they know vs. what they think they know when it comes to credit cards.

From the results, it could be inferred that managing credit cards is but a small part of a larger sense of financial understanding.

Predictably, in the survey those who had high knowledge of finance – and were aware of that – managed their credit cards most competently.

But the economists also found that a person’s perception of having financial knowledge mattered as much or more in how they treated their cards.

“Before beginning, we hypothesized two possibilities: people would be over-confident and this would lead them to make bad decisions or that people need confidence to act on the knowledge they possess,” Sam Allgood, one of the researchers, said. “Our study suggests that it is the latter.”

The survey measured five behaviors: Paying credit card bills in full; carrying a credit card balance; paying just the minimum; paying late fees; and exceeding a card’s limit.

Among the results, Americans who truly are financially savvy and know it are 15.5 percent more likely to pay their credit card bills in full compared to people with the same level of financial knowledge, but who perceive themselves as not having a high financial expertise.

Conversely, those described as the low self-perceivers are 15 percent more likely to carry a monthly balance, 12 percent more likely to pay the minimum each month, 11 percent more likely to incur a late fee and 6 percent more likely to exceed their spending limits.

“You must have actual knowledge to make good personal financial decisions,” Allgood said in a statement,” but people are not willing to act on that knowledge unless they also perceive themselves to be knowledgeable.”


About Victory State Bank

VSB Bancorp, Inc. (OTCQB: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank. For additional information, Victory State Bank may be reached at 718-979-1100 or visited online at

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