As consumers across the country amp up their holiday shopping, consider this: Nearly half of all U.S. credit card holders do not understand how interest works.
While 60 percent of American adults have credit cards, only 57 percent of cardholders in a recently completed survey sponsored by Standard & Poor's correctly answered a basic question on calculating interest. The survey, which measured financial smarts in 140 countries, found that just 1 in 3 survey respondents around the world demonstrated financial literacy.
"I wasn't surprised, but it is striking nevertheless," said Annamaria Lusardi, academic director of the Global Financial Literacy Excellence Center at the George Washington University School of Business and an author of the study.
Money smarts, it seems, is a global challenge — but more so in some parts of the globe than others.