Journal Article

Spotlight on Research: The Influence of Financial Literacy on High-Cost Borrowing

Abstract: Two topics have gained widespread attention in recent years. One is the rapid growth of high-cost borrowing offered by the alternative financial services (AFS) industry, such as payday loans, pawn shops, auto title loans, refund anticipation loans, and rent-to-own stores. The other topic is the efficacy of financial literacy on improving the overall financial well-being of individuals. A study by Annamaria Lusardi and Carlo de Bassa Scheresberg explores the characteristics of those who use high-cost borrowing and the influence of financial literacy on their borrowing behavior.1 The following is a summary of their paper.

Keywords: financial literacy; financial literacy education;

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Cascade

Publication Date: 2015-04

Volume: 2

Order Number: 87