Study reveals gender gap in credit card borrowing limits

The gender pay gap in the U.S. has been well documented, but new research shows that men don’t just earn more money, on average, but they also get higher borrowing limits when it comes to credit.

That’s according to new research from the Federal Reserve Bank of Philadelphia, which identified an “unexplained gender difference in bankcard limits” of around $1,323, with men enjoying higher limits than their female counterparts. The researchers came to that finding after controlling for credit scores, income disparity and demographic characteristics, CNBC reported.

The research was based on data over a period of 10 years, and found that the credit gap fluctuates over time.

In addition, the difference between genders also varied in terms of consumer’s credit limits. For smaller limits, women tended to have more borrowing power, but when it came higher amounts of $30,000 to $40,000, men had access to more credit.

Women were found to own more credit cards than men in general, but they have lower average balances, the researchers added.

The analysis was based on dat

The gender pay gap in the U.S. has been well documented, but new research shows that men don’t just earn more money, on average, but they also get higher borrowing limits when it comes to credit.

That’s according to new research from the Federal Reserve Bank of Philadelphia, which identified an “unexplained gender difference in bankcard limits” of around $1,323, with men enjoying higher limits than their female counterparts. The researchers came to that finding after controlling for credit scores, income disparity and demographic characteristics, CNBC reported.

The research was based on data over a period of 10 years, and found that the credit gap fluctuates over time.

In addition, the difference between genders also varied in terms of consumer’s credit limits. For smaller limits, women tended to have more borrowing power, but when it came higher amounts of $30,000 to $40,000, men had access to more credit.

Women were found to own more credit cards than men in general, but they have lower average balances, the researchers added.

The analysis was based on data from sole mortgage applications with no co-applicants, so as to accurately separate the findings by gender. As such, Nathan Blascak, research fellow at the Federal Reserve Bank of Philadelphia’s Consumer Finance Institute, said the results may not be indicative of all people with a credit card.

Blascak, who co-wrote the research with Anna Tranfaglia, a business analyst at the Federal Reserve Board of Governors, told CNBC they weren’t sure how big the gender gap might be before analyzing the data.

“It ended up being relatively small, especially when you think about what the gender pay gap is,” he said.

Blascak claimed that the difference is unlikely to be due to financial institutions being biased, as credit offers generally follow an automated process. He said the gender wage gap does play a role in the discrepancies however, but it’s not clear to what extent.

He said one possible reason for the discrepancy is when men and women originate their first credit card that sets initial limits, which accumulate over time. Further, he said there tend to be slight differences in the kinds of credit card offers received by men and women. Men tend to receive more offers on average, and the solicitations are slightly different.

CNBC said the research is one of the first papers of its kind to apply large administrative data to try and answer questions on how men’s and women’s experiences differ.

a from sole mortgage applications with no co-applicants, so as to accurately separate the findings by gender. As such, Nathan Blascak, research fellow at the Federal Reserve Bank of Philadelphia’s Consumer Finance Institute, said the results may not be indicative of all people with a credit card.

Blascak, who co-wrote the research with Anna Tranfaglia, a business analyst at the Federal Reserve Board of Governors, told CNBC they weren’t sure how big the gender gap might be before analyzing the data.

“It ended up being relatively small, especially when you think about what the gender pay gap is,” he said.

Blascak claimed that the difference is unlikely to be due to financial institutions being biased, as credit offers generally follow an automated process. He said the gender wage gap does play a role in the discrepancies however, but it’s not clear to what extent.

He said one possible reason for the discrepancy is when men and women originate their first credit card that sets initial limits, which accumulate over time. Further, he said there tend to be slight differences in the kinds of credit card offers received by men and women. Men tend to receive more offers on average, and the solicitations are slightly different.

CNBC said the research is one of the first papers of its kind to apply large administrative data to try and answer questions on how men’s and women’s experiences differ.