Journal of Banking and Financial Economics © 2024 Authors

2024, 1(21), 1–13 Creative Commons BY 4.0 license

ISSN 2353-6845 ([Link]
DOI: 10.7172/[Link].2024.1.1 [Link]

Consumers’ Financial Literacy in Poland

- the Research and the Resulting Conclusions

Andrzej Bień
Warsaw School of Economics, Institute of Banking, Poland
abien@[Link]
[Link]

Łukasz Gębski
Warsaw School of Economics, Institute of Banking, Poland
lgebski@[Link]
[Link]

Received: 26 April 2024 / Revised: 26 June 2024 / Accepted: 1 July 2024 / Published online: 15 July 2024

ABSTRACT

Background & Purpose of the article: The research paper raises important issues in the field of consumer financial
literacy in Poland. The authors note that efforts made in financial education are not fully effective and the number
of wrong decisions made by consumers is high. The study led to two interesting observations: high self-assessment
of knowledge is not confirmed in practice. The mistakes made do not result solely from the lack of knowledge of
consumers. They are very often a result of their personality and a way of perceiving reality.
Methods: The authors compared Polish and foreign research results in the field of financial literacy and the
study of financial knowledge of Polish consumers conducted in 2024. The conducted research was not limited
only to “self-assessment” but it contained a pool of questions verifying the practical knowledge and behavior of
consumers in the financial market.
Findings & value added: The study confirmed that despite a declared financial knowledge and experience in using
financial products & services, consumers make important mistakes, and overestimate their knowledge: they do
not read credit agreements, do not compare financial products, their financial knowledge is assumed and much
lower than declared. It implies the need to ensure an adequate – higher – level of institutional protection in the
financial market.
The analysis of interactions between knowledge, experience and practice on the financial market allows us to
identify the educational gap. The results of the analysis could provide direction for other researchers on in-depth
research on the impact of heuristics on consumer behavior in the financial market and their correlation with the
level of knowledge and institutional protection in the financial market.

JEL classification: G51, G53, G40, I2

Keywords: financial literacy, behavioral finance, consumers’ cognitive errors, responsible lending and borrowing,
financial products and services.
A. Bień, Ł. Gębski Journal of Banking and Financial Economics 2024, 1(21), 1–13

1. INTRODUCTION

Financial literacy has been the subject of many studies and scientific publications for some time. Researchers
emphasize that financial knowledge and rational consumer decisions are the issues that go far beyond the scope
of economics. Issues relating to the area were the subject of research by psychologists and sociologists, and the
results obtained by them sometimes better explained the previously identified problems.
People face complex financial decisions at all stages of their lives. As young people grow into adulthood, they
start making decisions about house loans, credit cards, life insurance, and managing their budget. The decisions
have only become more complex with the advent of new financial products, new ways to make payments, modern
investment instruments such as crypto assets, and most recently the rise of inflation. For the reasons and others,
financial literacy, by which we mean people’s knowledge of and ability to use fundamental financial concepts in
their economic decision-making, matters and is more important than ever. (cit. Lusardi & Mitchell, 2023).
The socio-economic perspective that shows a direct relationship between economic knowledge and financial
inclusion has been also noted (Bado et al., 2023; Rudeloff, 2019). A lack of access or limited access to the financial
market in modern societies provokes social exclusion (Eldomiaty et al.). The actual financial knowledge of
consumers from the perspective of scientific research is much lower because they tend to overestimate their
knowledge, prefer their own experiences over objective information and make many cognitive biases, which
consequently lead to wrong decisions in the financial market.
From an academic perspective, financial literacy is one of the most important areas of behavioral finance.
Repeated errors indicate a low level of financial education, which is not focused on building positive behavioral
patterns, but on transmitting nominal knowledge in the field of economics and finance (Rich, 2018). Perhaps,
however, the problem does not result from the level of knowledge, but from the nature of human nature – full of
various types of emotions and based on individuality.
Consumers learn economic concepts from an early age and are taught how to proceed when choosing and
using financial products and services without seeing any practical effects of the efforts. So, what is the reason
for the lack of effective education? Are the methods used in this area ineffective or is it wrong to assume that
knowledge will simply eliminate all errors?

2. KNOWLEAGE, LEARNING METHODS AND CONSUMERS’ COGNIOTIVE BIASES

Financial literacy is a combination of knowledge and practical skills, so its possession is not possible without
realizing the role of financial education and the phenomenon of acquiring specific skills. In the area of personal
finance, the speed of learning and the level at which consumers can use it are not always correlated. It happens
that people who have knowledge of financial concepts and principles, for various reasons, cannot use them in
practice or their behavior even contradicts the knowledge. At the same time, for example, young people, despite
gaps in knowledge, make rational financial decisions and very efficiently are using modern financial products.
Measuring financial knowledge boils down to three key skills (Lusardi & Mitchell, 2023) that an independent
and rational consumer should have:
• the ability to calculate and interpret outcomes in terms of interest rates,
• understanding and the ability to interpret inflation and its consequences,
• the ability to practically diversify risk.
Researchers examining financial literacy shift the burden of definition from individual nominal financial
knowledge to practical skills. Knowing a specific concept is only an introduction to understanding how it works and
how important it may be in practice. Understanding financial concepts is the ability to use them consciously. In the
financial market, it is also important that an individual can resist the temptation of consumerism and avoid making
cognitive errors. Chen and Volpe noted that consumers can safely use financial market products and services
thanks to knowledge and personal skills (Chen & Volpe, 1998). Especially in the current era it is impossible to enjoy
consumption without using financial products (Feghali et al., 2021; Ozili, 2020).
Teaching economics and acquiring financial knowledge are crucial from the perspective of consumers.
Knowledge of economic concepts, understanding the mechanisms and connections between them is the basis for
the safe use of financial products and services.
Maison, Trzcińska and Sekścińska, (Maison et al., 2015) conducted an analysis of economic and financial
knowledge teaching programs. Their study showed the low level of economic knowledge of Poles. From the

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perspective, the obvious conclusion is the need for more intensive and effective economic education of society.
Economic education programs are relatively new and, according to researchers, it is difficult to clearly assess their
results. Western European countries have more experience in the area. Experiences of other countries show that
simply conducting educational campaigns is not sufficient. To be effective, they must be adapted to the needs and
capabilities of recipients.
Economic education is an important element in a child's development. It is understood as providing the child
with knowledge of economics, both conceptually and in terms of everyday functioning. According to Maison,
schools and specialized organizations are primarily responsible for the economic education of children
(Maison et al., 2018; Górski, 2016; Manczak, 2021). Another issue is economic socialization, it is less formal and
involves the transfer of broadly understood skills related to functioning in the world of finance. In the area, family
relationships are of great importance because this is where behavioral patterns and values related to finances
are transmitted.
Bandura reached similar conclusions. His social learning theory posits that behavioral learning occurs not only
through reactive and operant conditioning, but also through observation of other people's behavior (Bandura,
1986; Skinner, 1957). The theory assumes that new patterns of behavior are acquired via two key mechanisms:
• Learning by consequences, which is like operant conditioning, involves consciously constructing hypotheses
regarding what actions, and under what circumstances, have led to desired results,
• Modeling, where behavior is based on the observation of other people’s actions and their consequences.
Both learning mechanisms proposed by Bandura can be successful in financial education, but they are not
mechanical in nature. Therefore, the effectiveness of economic education becomes a challenge because otherwise
consumers either quickly forget the knowledge they have acquired or, despite having it, remain susceptible to the
influence of external factors. They are repeated cognitive errors that verify the effectiveness of de-education in
practice and expose shortcomings.
Behavioral observations of consumer behavior concern interactions with the financial market. They prove the
dominance of psychological factors over nominal financial literacy. A perfect example of such a situation is the
prospect theory by Kahneman and Tversky (Kahneman, 2003; Kahneman & Tversky, 1992), which explains people's
decision-making under risk. It is contrary to the expected utility theory that dominates in mainstream economics.
Their research revealed some extremely interesting and important for the assessment of learning outcomes -
acquiring financial knowledge - from a psychological perspective. It turned out that the tendency to take risks
differs depending on the life context of the decision. Consumers are willing to take even great risks in the financial
sphere, but they are less willing to do so in the health sphere. Therefore, the borders of the so-called “rational
decisions” may be different in different areas of our lives. Such an assumption is extremely important because it
would undermine the assumption about the effectiveness of education as a tool increasing the level of consumer
security in the financial market. Behavioral finance reveals many such situations.
The literature on the subject in behavioral finance is very extensive. Therefore, we decided to select and briefly
discuss those attributional and cognitive errors whose impact was noticed in the conducted survey.
In the light of the rational choice theory (Hausman, 1995), people make decisions in such a way as to maximize
their utility. Consumers place excessive trust in sellers and people consider them competent in financial matters.
They then stop being careful and give up many elements of offer analysis. Thaler points out that often supposedly
irrelevant factors (Thaler, 2015 [NYT]), previously considered marginal, can significantly affect both the financial
decisions made and the level of satisfaction with the decisions. Here, for example, one might cite the disastrous
– albeit strongly opinion-forming – impact of unprofessional financial advisors, such as online influencers or sales
made by persuasive telemarketers.
Households evaluate and compare financial products based on the functional perspective of the household
budget, not financial categories (e.g. APR). Mental accounting (Thaler, 2004) is one such a factor. Under conditions
of fixed remuneration, a consumer allocates their costs in the same way. Therefore, loan offers are analyzed more
in terms of fixed payments and the need to secure sufficient funds.
The effect of overconfidence is quite common, and in this case, people tend to overestimate knowledge
and their own competences. However, from the point of view of the financial market, it is crucial to assess the
probability of negative consequences in the future, and the lack of such ability may lead to risk underestimation.
Own experiences play a fundamental role in the behavioral approach, but they involve a much greater risk
than the effort that should be put into education (Vissing-Jorgensen, 2003). It is usually because their lack of self-
awareness prevents them from accurately assessing their own abilities (Schlösser et al., 2013; Dunning, 2011).

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A. Bień, Ł. Gębski Journal of Banking and Financial Economics 2024, 1(21), 1–13

3. RESEARCH ON FINANCIAL LITERACY IN POLAND

Research related to financial competences, financial literacy, and financial behavior, carried out on behalf
of the OECD (OECD, 2016, 2020), indicates a gradual improvement in Poles’ financial knowledge. In 2020 Polish
consumers achieved a score of 13 out of 21 possible points, indicating that 61.9% of the population feels confident
in financial matters and is not far behind the leading countries in the ranking. It is an increase from their 2016
score of 11.6 points. Slovenia emerged as the top performer in the 2020 ranking with 14.7 points, where 70% of
the population claimed proficiency in financial knowledge and skills. Austria followed closely behind with a score
of 14.4 points, and 68% of its population demonstrating financial competence. Conversely, Italy (11.1 points) and
Romania (11.2 points) recorded the lowest financial literacy results.
However, the study revealed overall weak financial attitudes among Polish consumers, with a total of 2.6 out of
5 points indicating a focus on immediate financial needs rather than long-term planning. Additionally, the research
confirmed a significant level of overconfidence among respondents, with individuals often overestimating their
financial competence, as compared to their actual knowledge (Rutecka-Góra, 2020).
Beckaman and Kiesl-Reiter (2023) provided evidence from a unique and ex ante harmonized dataset for
nine countries of Eastern Europe. Their analysis based on the most recent wave of the OeNB Euro Survey, which
was conducted in fall 2022. The level of financial literacy varies between and within the analyzed countries. The
research findings show that there is no gender gap in financial literacy and there is no clear-cut relationship
between age and financial literacy. Swacha-Lech and Solarz (2021) drew attention to the speed with which the
Millennials adopt quickly practical aspects of using modern financial products offered by LendTech’s. Their practical
abilities were even higher than their actual financial knowledge.
In 2023, as part of the #JacyPolacy series, Dominika Maison presented a study involving a representative
group of 1,076 consumers (Maison, 2023). An analysis of responses revealed that many Poles possess accurate
financial knowledge, such as understanding the interest rate risks associated with foreign currency loans. However,
a discrepancy was observed between older and younger generations, with those over 55 exhibiting the highest
levels of financial knowledge.
Research related to financial literacy has been conducted many times. Most of them demonstrated high self-
assessment and knowledge of financial products and services. Observations and analyses have been shared by
Grzesiuk (2019) who focused on Polish political views and examined the possible connections between financial
knowledge and approach to economic issues. Gola has investigated household financial behavior (Gola & Smyczek,
2019). In 2019, Święcka and her team examined the level of financial knowledge among high school students in
Poland (Święcka et al., 2020). The research results demonstrated a good level of financial knowledge of young
people in Poland – 45.3% of the examined obtained an average level score and 43.8% achieved a high-level score.
Boratyn (2022) surveyed students regarding their knowledge and attitudes towards savings products. Suska (2023)
compared the offer of financial education in Poland and other European countries.
Analyses have revealed that financial literacy, defined as the understanding of concepts, categories, and financial
products and services, is relatively high among consumers. Individuals demonstrate familiarity with major financial
concepts. However, when it comes to practical skills, which are crucial in navigating the financial market, people
tend to perform less effectively. To validate findings from previous research and assess the current landscape,
a survey on the financial knowledge of Polish consumers was conducted in January 2024. The results obtained aim
not only at assessing the level of consumers’ knowledge but also at pinpointing areas in which efforts should be
intensified in terms of financial education and outreach to enhance understanding of the financial market.

3.1. Survey on Financial Literacy of Polish Customers

In January 2023, a PAPI & CAWI survey was conducted by Lukasz Gebski on the financial literacy of consumers
in Poland. The research group of 1002 people (N = 1002) took part in the study and the statistical distribution
of the research group was maintained in accordance with the demographic profile from the National Census
conducted in 2021 (see Table 1).
The study aimed at verifying the level of consumers’ knowledge regarding financial categories and at confirming
or denying the influence of behavioral factors on the decisions made by respondents in the financial market. The
behavioral factor complemented the study. A lack of influence of behavioral factors would suggest focusing only
on effective consumer education. The occurrence of attribution errors would mean the need to take a critical
look not only at the level of financial knowledge, but also at the scope of institutional consumer protection in the
financial market – the need to increase the level of protection.

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Table 1
Distribution and characteristics of the sample (N = 1002)

Variable/Question Description N %
less than 25 212 21.2
25–40 277 27.6
How old are you?
41–60 279 27.8
more than 60 234 23.4

primary education 473 47.2

What is your education level? secondary education 306 30.5

high education 223 22.3

village or small town (< 50 000 inhabitants) 393 39.4

Where do you live? medium city 340 34.0

big city (> 100 000 inhabitants) 269 26.8

I live alone 194 19.4

We are a childless couple 325 32.5
What your household We live with children younger than 15 years old 237 23.6
looks like?
We live with children older than 15 years 192 19.2
I am a student or someone else supports me 54 5.3

I make financial decisions independently 307 30.6

I make financial decisions together with my partner 416 41.5
How financial decisions I make financial decisions, but I consult people I trust
are made in your household? 215 21.5
in this area
I do not participate in financial decisions – they are made
64 6.4
by my partner/parents

Yes, I am repaying the loan now or have repaid it

613 61.4
in the past
No, I am not paying off now nor I have never used it
389 38.6
in the past

Have you ever used any type Yes, I bought something financing the purchase with
387 38.6
of loans? a consumer loan
No, I have never bought anything using consumer credit
409 40.8
to finance the purchase
No, I have never purchased anything using consumer credit
206 20.6
and I do not want to use credit in the future

I have a fixed salary 852 85.2

How do you earn money? I have variable income (temporary contracts,
150 14.8
commissions…)

Yes 986 98.4

Do you have a bank account?
No 16 1.6

Source: Financial literacy survey 2024 – conducted by Lukasz Gebski.

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3.2. Methods

The analysis of the results of the consumer financial knowledge survey was carried out to assess the structure
of the answers provided to obtain a comprehensive picture of the financial knowledge of the surveyed group,
against the background of demographic data. The aim of the study in this area was to determine the relationship
between financial knowledge and: the age of the respondents, their education, place of residence, household
structure and experience in using financial products and services.
The second cross-section of the study was to verify the respondents’ declarations regarding their financial
knowledge. The verification questions verified both the actual knowledge of the omissions and the compliance of
the declarations with practical behavior in the financial market. The survey included different types of questions:
• questions regarding the declared level of financial knowledge and knowledge of financial concepts (as in most
similar studies in Poland and abroad);
• questions verifying the respondents' actual knowledge of financial concepts and categories;
• questions examining the knowledge of the financial market (products and services) and the respondents'
practice in taking out loans;
• questions relating to practical aspects of the respondents' behavior in the financial market: individual
preferences in terms of loan repayment, how they conclude loan agreements and questions regarding the role
of financial advisors.

At the first stage, the obtained answers were examined. Then, the actual knowledge of financial concepts and
categories was verified based on testing questions.
In the second phase of the study, the responses verifying financial knowledge and determining practical market
behavior were subjected to statistical and correlational analysis in terms of connections with the demographic
characteristics of the respondents and their personal experience in the financial market.
The following statistical tests were used:
1. Pearson’s χ2 test (a non-parametric test) used to examine the relationship between two variables measured on
a qualitative scale. A statistically significant result of p < 0.05 indicates a relationship between the variables.

/ ^O i - E ih2
x 2c =
Ei

The strength of the relationship is calculated based on Cramer’s V coefficient:

|2
Cramer’s V =
n $ min ^r - 1, c - 1h

2. Kendall’s tau correlation analysis (a non-parametric method) for examining the relationship between two
variables measured on an ordinal scale. The aim of the study was to determine the actual level of knowledge
of the respondents in relation to the declared level - to determine the extent to which we are dealing with
overestimation of the financial knowledge in the research group.

nc - nd
x=
# n # ^n - 1h
1
2
The Kendall’s tau correlation value can range from -1 to 1, where values closer to -1 mean a strong negative
correlation and values closer to 1 mean a strong positive correlation.

3.3. Results & Observations

The respondents’ level of financial knowledge was objectively high – 87.9% claimed that they know and at least
more or less understand the concept of interest rate as the cost of money (Table 2). More than half (56.7%) also
declared some awareness of the concept of APRC/RRSO (RRSO – Roczna Rzeczywista Stopa Oprocentowania; APRC –
Annual Percentage Rate of Charge). From the perspective of CEE countries, where mortgage loans are still granted to

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consumers at variable interest rates, it is encouraging that 74.7% of the respondents declared that they understand
how the variable interest rate loan mechanism works as well as the possible consequences for borrowers.
Consumers are aware of the risk of excessive household debt – for 88.7% of respondents, it is a situation in
which their current income is not sufficient to repay their loans on time (Table 2). For 50.6%, debt significantly
burdening household budgets is a dangerous sign. Only 25% believe that excessive debt requires new loans to be
taken out to repay previous loans (see Table 2).

Table 2
Knowledge and understanding of principal financial concepts

Variable/Question Description N %
I know and understand the concept of interest rate 493 49.2
as the cost of money
I know and more or less understand the concept 388 38.7
Interest rate as the cost of money of interest rate as the cost of money
I heard but I don't understand interest rate mechanism 109 10.9
as the cost of money
I refuse to answer the question 12 1.2
I know, understand and know what the APRC is for 200 20.0
I more or less know, understand and know what 368 36.7
the APRC is for
APRC (RRSO)
I've heard of it, but I don't understand the calculation 217 21.7
mechanism and I can't practically interpret the APRC value
I refuse to answer the question 36 3.6
I understand the rules and mechanisms that cause changes 381 38.0
in the loan interest rate
I understand the principle of variable interest rate 368 36.7
Variable interest rate on the loan on a loan, but I don't understand what influences it
I do not know or understand the mechanisms that cause 217 21.7
changes in loan interest rates
I refuse to answer the question 36 3.6
This is a situation in which the current repayment 504 50.6
of loans is a heavy burden on the household budget
This is a situation in which my income is not sufficient 884 88.7
Over-indebtedness*
to repay loans on an ongoing basis
This is a situation in which I have to take out new loans 253 25.4
to repay the previous ones
* More than one answer accepted.
Source: Financial literacy survey 2024 – conducted by Lukasz Gebski.

Consumers’ approach taken in terms of reading financial contracts before signing them indicated a few
significant statistical correlations – relationships between age, place of residence, education, and the structure of
the consumer household (see Table 3):
• there was a statistically significant relationship between the approach taken to signing loan agreements and
age (V = 0.11; p < 0.05) and education (V = 0.24; p < 0.001) where the relationship with education was stronger.
Those who claimed that they carefully read loan agreements tended to be young people up to 25 years of age,
as well as those with higher education.
• there was a statistically significant relationship between the approach taken to signing consumer loans and place
of residence (V = 0.17; p < 0.001) and household type (V = 0.13; p < 0.001). Those living in large cities and raising
children or themselves dependent on someone else were more likely to carefully read credit agreements.

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Table 3
Consumer behavior in concluding contracts and trust in sellers of financial products – the relationship between age,
education, place of living, household structure and the practice of concluding credit agreements

leass than between between more than

V P
25 yo 25–40 yo 41–60 yo 60 yo
I always read loan agreements before I sign them 40.60% 37.50% 41.20% 31.60%
I only read the most important points and ask the
26.90% 37.90% 38.00% 39.70%
seller about the rest
I don't read loan agreements – they are long, boring
13.70% 11.90% 11.50% 20.10% 0,11 0,022*
and I don't understand them...
Only sometimes I inspect them – but you can't
10.80% 6.60% 5.00% 5.60%
negotiate them anyway, so why do it...
I refuse to answer this question 8.00% 6.10% 4.30% 3.00%
primary secondary students high
V P
education education of economy education
I always read loan agreements before I sign them 27.50% 25.70% 70.00% 60.50%
I only read the most important points and ask the
37.70% 52.10% 15.00% 23.80%
seller about the rest
I don't read loan agreements – they are long, boring
20.90% 14.20% 0.00% 4.50% 0,24 ***
and I don't understand them...
Only sometimes I inspect them – but you can't
9.70% 4.00% 3.80% 4.50%
negotiate them anyway, so why do it...
I refuse to answer this question 4.20% 4.00% 11.20% 6.70%
village & medium
big city V P
small city size city
I always read loan agreements before I sign them 31.10% 34.40% 51.90%
I only read the most important points and ask the
37.00% 42.10% 27.00%
seller about the rest
I don't read loan agreements – they are long, boring
19.10% 13.20% 7.80% 0,17 ***
and I don't understand them...
Only sometimes I inspect them – but you can't
7.70% 7.40% 4.80%
negotiate them anyway, so why do it...
I refuse to answer this question 5.10% 2.90% 8.50%
living childless couples with
others V P
alone couples children
I always read loan agreements before I sign them 38.70% 30.20% 40.70% 57.40%
I only read the most important points and ask the
29.90% 39.60% 38.00% 20.40%
seller about the rest
I don't read loan agreements – they are long, boring
16.50% 19.10% 11.00% 0.00% 0,13 ***
and I don't understand them...
Only sometimes I inspect them – but you can't
10.30% 6.50% 5.40% 7.40%
negotiate them anyway, so why do it...
I refuse to answer this question 4.60% 4.60% 4.90% 14.80%
P – level of statistical significance, V – Cramer 's V strength of relationship.
Source: Financial literacy survey 2024 – conducted by Lukasz Gebski.

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Analyses showed also that there was a statistically significant relationship between approach taken to signing
loan agreements and taking out loans in general (V = 0.26; p < 0.001) and taking out instalment loans (V = 0.14;
p < 0.001). Loan agreements were more carefully read by people who admitted that they did not use loans in
general, as well as by people who took out consumer/instalment loans.

Table 4
Practical knowledge of financial products & services

Question Possible anwsers Distribution

Definitely YES, deposits in all banks operating in Poland are covered
31.2%
by the BFG guarantee up to the amount of EUR 100,000
I have funds in my bank account
and, as I understand it, they are It seems to me that all deposits in all banks operating in Poland
48.2%
covered by the Bank Guarantee are covered by the BFG guarantee up to the amount of EUR 100,000
Fund deposit guarantee system Definitely NO – there are foreign banks operating on the Polish
up to the amount of EUR 100,000? 10.2%
market whose deposits are not covered by the BFG guarantee system
I don't know and I don't know the regulations in this area 10.4%
I know what it is – I used it 10.7%
I know what it is but I haven't used this service 29.8%
BNPL (Buy Now Pay Later)
I've heard of BNPL but I don't know how it works 23.5%
I haven't heard of BNPL, but I don't know how it works 36.0%
The product/service of PKO BP bank – consistsing on innovative way
11.5%
of payment using mobile telephone

BLIK is it This is a FinTech product 25.0%

The name of the service offered by VISA International 4.7%
I do not know exactly 58.8%
Source: Financial literacy survey 2024 – conducted by Lukasz Gebski.

An analysis of the findings of the consumer survey shows several interesting observations leading to the
following conclusions regarding the financial literacy of the respondents and their behavior in the financial market.
The influence of behavioral factors such as heuristics and cognitive errors on how consumers behave when
choosing and evaluating financial products and services is particularly tangible.
The study confirms that consumers overestimate their level of knowledge and are uncritical towards their
own shortcomings when it comes to the responsible use of financial products and services. It proves consumers’
superficial knowledge, limited to financial concepts simply defined. They use financial product and services
without knowing how they are constructed (BFG guarantee & BNPL) and who is the right provider (BLIK).

Table 5
Relationship between credit use and financial knowledge

INTEREST RATE no credit history I took loans V P

I know and understand the concept of interest rate
47.00% 50.60%
as the cost of money
I know and more or less understand the concept of interest
33.70% 41.90%
rate as the cost of money 0.18 ***
I heard but I don't understand interest rate mechanism
17.00% 7.00%
as the cost of money
I refuse to answer the question 2.30% 0.50%

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Table 5 – continued

APRC/RRSO no credit history I took loans V P

I know, understand and know what the APRC (RRSO) is for 17.80% 38.40%
I more or less know, understand and know what the APRC
34.20% 39.00%
(RRSO) is for
I've heard of it, but I don't understand the calculation 0.09 0.062
mechanism and I can't practically interpret the APRC 41.40% 27.90%
(RRSO) value
I refuse to answer the question 1.00% 0.30%
VARIABLE RATES no credit history I took loans V P
I know and understand the concept of interest rate
35.10% 42.70%
as the cost of money
I know and more or less understand the concept
25.40% 43.90%
of interest rate as the cost of money 0.21 ***
I heard but I don't understand interest rate mechanism
25.40% 19.20%
as the cost of money
I refuse to answer the question 6.50% 1.80%
INTERPRETATION OF APRC/RRSO no credit history I took loans V P
Which loan is cheaper for me from APRC/RRSO perspective?
20.40% 48.40%
Both are identical
The loan that I repay in one lump sum of PLN 1,200
11.80% 21.50% 0.06 0.315
after a year is more beneficial
I dont know exacly 49.40% 24.80%
it doesn't matter – I will spend the same amount 18.40% 5.30%
P – level of statistical significance, V – Cramer 's V strength of relationship.
Source: Financial literacy survey 2024 – conducted by Lukasz Gebski.

In terms of interdependencies between the groups of respondents and their profile, from the point of view
of the purpose of the study, it is worth analyzing the significance of the connections between the personal credit
experience of the respondents and their declared level of financial knowledge. As expected, analyses concerning
the relationship between the use of loans and financial knowledge confirmed the influence of consumers’ personal
experiences of financial products and the declared financial knowledge. The analysis of the results presented in
Table 5 shows that there is a statistically significant relationship between the overall use of loans and declared
knowledge of the cost of money (V = 0.18; p < 0.01) and variable interest rates (V = 0.21; p < 0.001). People
who have taken out loans tended to claim knowledge and understanding of concepts such as the cost of money
and variable interest rates. However, it was not demonstrated by the study group that taking out loans had
a statistically significant impact on the knowledge of other financial concepts.
Consumers are uncritical towards their own shortcomings when it comes to the responsible use of financial
products and services (see Table 7).

Table 6
Relationship between the declared level of financial knowledge and actual knowledge (tested using Kandall’s Tau)

Low knowleage Averege knowleage High knowleage

(real knowleage) (real knowleage) (real knowleage)
LOW (declared level of knowleage) 93.3% 6.7%
AVEREGE (declared level of knowleage) 86.3% 12.7% 0.9%
HIGH (declared level of knowleage) 51.8% 36.6% 11.6%
Source: Financial literacy survey 2024 – conducted by Lukasz Gebski.

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A. Bień, Ł. Gębski Journal of Banking and Financial Economics 2024, 1(21), 1–13

4. CONSLUSIONS

On the one hand, the survey results indicate a relatively high level of consumers’ financial literacy. As many
as 87.9% of respondents confirmed that they know and at least more or less understand the concept of interest
rate as the cost of money (see Table 2). More than half (56.7%) also declared some knowledge of the definition of
RRSO/APRC.
Consumers are aware of the risk of excessive debt – for 88.7% of respondents it is a situation in which their
current income is not sufficient to repay the loan on time. For 50.6%, debt that significantly burdens household
budgets is a signal of danger. Only 25% believe that excessive debt requires taking out new loans to repay the
previous ones (credit trap).
An in-depth analysis of the results obtained does not lead to clear conclusions. The essence of the problem
is not only the fact itself that consumers overestimate their knowledge. Even though their knowledge is getting
better, they still make many mistakes proving a lower level of their knowledge than would result from the survey.
Our analysis of the study results indicates that researchers were often uncritical about the answers they
obtained. High indicators assessing the knowledge of financial concepts and categories resulted from the lack of
verification of the respondents’ self-assessment. Almost 90% of the declared knowledge of the concept of interest
rate and almost 90% of other concepts do not reflect the actual situation. Less than half of the respondents can
compare the costs of loans using the RRSO/APRC (see Table 5).

Table 7
Answers to questions testing financial knowledge (selected questions)

Question Answer N % Comment

I’m buying a TV in installments. The bank offers Loan A (repaid once at the end) 111 11.1
me two 0% loans:
a) repaid once after 12 month in the amount Loan B (repaid in 12 installments) 152 15.2
of PLN 1,200
b) repaid in 12 equal monthly installments Both are similar 250 25.0 right answer
of PLN 100 each.
Which loan is cheaper in terms of APRC/RRSO? I dont know 489 48.7

Definitely YES, deposits in all banks

operating in Poland are covered by
312 31.2
the BFG guarantee up to the amount
of EUR 100,000
It seems to me thatall deposits in all
I have funds in my bank account and, banks operating in Poland are covered
as I understand it, they are covered 482 48.2
by the BFG guarantee up to the
by the deposit guarantee system amount of EUR 100,000
of the Bank Guarantee Fund up to
the amount of EUR 100,000? Definitely NO – there are foreign
banks operating on the Polish market
102 10.2 right answer
whose deposits are not covered by
the BFG guarantee system
I don’t know and I don’t know the
104 10.4
regulations in this area
The product/service of PKO BP bank
– consisting of innovative way 115 11.5
of payment using mobile telephone

BLIK is it This is a FinTech product 250 25.0 right answer

The name of the service offered by
47 4.7
VISA International
I do not know exactly 588 58.8
Source: Financial literacy survey 2024 – conducted by Lukasz Gebski.

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A. Bień, Ł. Gębski Journal of Banking and Financial Economics 2024, 1(21), 1–13

Polish consumers overestimate their level of financial knowledge and are uncritical of their own mistakes and
ignorance. For many of them, knowledge about financial risks and previous credit experiences are not an obstacle
to irresponsible borrowing behavior (see Table 7):
• not reading loan agreements before signing them (lack of interest in detailed information or uncritical trust in
advisors);
• lack of interest in the real cost of credit (question about the cost of credit card credit).

Consumers are not aware how the financial market works and which products they use:
• question about the BFG (Bank Guarantee Fund),
• questions about the BLIK payment system,
• questions about “Buy Now Pay Later”.

Many of the errors made are cognitive errors resulting from false attribution – so is it possible to eliminate
them? Will financial knowledge be a sufficient factor to avoid making wrong financial decisions?
The study of the financial knowledge of Polish consumers shows also that there is a persistent gap in large
and small centers (see Table 3). Because market behavior is shaped more by the social environment and not
by knowledge itself, residents of rural areas and small towns who have poorer contact with positive behavior
patterns make more mistakes and are less inquisitive when analyzing loan offers. Consumers from smaller centers
more often do not read contracts before signing them and declare that they do not understand many economic
concepts and categories.
Improvement requires further work on popularizing knowledge of financial categories and promoting
responsible consumption behavior among the young, but also on developing practical skills in all social and
educational groups. Without the component, the consumer protection legal system will remain only partially
effective.
The study also indicates the need to increase the level of institutional consumer protection. The results show
that Polish consumers have problems not only with correctly identifying the exchange risk (which has been the
focus of regulatory initiatives so far), but also that interest rate risk is a serious challenge. It this case it’s advisable
to quickly introduce regulations obliging banks not only to offer loans denominated in foreign currencies, but also
to lend to consumers only at a fixed interest rate. Banks can hedge the interest rate risk, but for consumers such
a risk is a very serious threat to the stability of the household budget. In practice, consumers cannot fully assess
the risk and do not understand its scale.

This area requires further research from the scientific community. Psychological knowledge is an extremely
valuable addition to economic knowledge. It is advisable to conduct joint research in the area to better understand
the nature of behavioral errors made in the financial market and their relationship with financial literacy.

Funding
The research received no funds.

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship, and publication
of the article.

Declaration about the scope of AI utilization

The authors did not use an AI tool in the preparation of the article.

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