Consumer debt has been rising for decades, and a new survey and study suggests that a lack of personal finance knowledge may be partly to blame.

Clever, an online platform that connects consumers with real estate agents, studied Federal Reserve and Census data to identify trends in consumer debt.

What it found:

• The average household in 1950 had $533 in debt, compared with $31,420 in 2018.

• Households in the 1970s had, on average, $78 in revolving debt (mainly credit card debt), compared with $8,000 today.

• Consumers paid $113 billion in credit card interest and fees in 2018, which is up from $74.5 billion in 2013.

Credit card debt has been particularly impactful to consumers’ bottom lines. More than 70% of credit card users do not pay off their entire balance each month, data showed. Likewise, more than 50% of consumers either break even or spend more than their income each year. This suggests that some may resort to using credit cards if they are hit with unexpected expenses.

The high cost of low financial literacy

As part of its research, Clever wanted to determine how big of a role financial literacy plays in consumers’ money and credit habits. To do so, it polled 1,000 consumers to see how much they knew about topics such as credit cards and loans. Overall, respondents showed they have a lot to learn.

Respondents, on average, answered only 67% of the questions correctly, which Clever pointed out would translate into a “D” if the survey were a college exam. The areas that consumers knew most about were:

• Credit scores, where 74% of questions were answered correctly

• Credit cards, where 66% were answered correctly

• General loans, where 61% were answered correctly

For example, respondents were asked to provide true or false responses on “Credit cards traditionally have a lower interest rate than car loans” and “It hurts your credit to check it yourself.”

When it comes to the generations, older consumers were more credit savvy. According to Clever, baby boomers had an average financial literacy score of 76%, compared with 69% for Generation X and 56% for millennials. (The Pew Research Center categorizes baby boomers as those between ages 55 and 73 in 2019, Gen Xers as those between 39 and 54 and millennials as those between 23 and 38.)

On credit card questions, baby boomers (on average) scored 75%, compared with 67% among Gen Xers and 56% among millennials. Interestingly, only 40% of millennials knew the definition of interest.

Financial literacy is key to making wise money changes that can save you money in interest and fees. If you want to brush up on your financial knowledge, try listening to a couple of personal finance podcasts or reading a few personal finance books. As your money knowledge grows, so too might your credit score and bank account balance.