2019 1 KYOUNG TAE KIM , JONGHEE LEE , AND SHERMAN D. HANNA The Effects of Financial Literacy Overconfdence on the Mortgage Delinquency of US Households This study investigated the effect of objective and subjective fnancial literacy on mortgage payment delinquency using the 2015 National Financial Capability Study dataset. A hierarchical model showed a substantial negative effect of objective literacy on delinquency, but subjective literacy did not have a signifcant effect. The predicted likeli- hood of delinquency at the 10th percentile of objective literacy was over three times as high as the likelihood at the 90th percentile. In a model with combinations of high or low objective and subjective fnancial literacy, those who were overconfdent had a delinquency likelihood three times as high as those who had high objective and subjective liter- acy. Subjective literacy had substantial effects on delinquency both for high- and low-objective literacy levels. In fnancial education, attention should be focused not only on objective learning but also making sure consumers are aware of the limitations of their understanding. While the subject of fnancial literacy has been a salient issue to fnancial practitioners and consumer advocates (Gerardi, Goette, and Meier 2010), the subject gained more attention after the Great Recession (USA Today 2013). Many studies have found that consumers have low fnancial literacy (e.g., Atkinson and Messy 2012; Lusardi and Mitchell 2017; Lusardi and Tufano 2015). Low fnancial literacy might lead consumers to make bad decisions (Van Rooij 2008). For example, Lusardi (2008) found that fnancially illiterate individuals are less likely to achieve adequate retirement. Being fnancially illiterate has been found to be linked to fnancial mistakes (Stango and Zin- man 2009). Bernanke (2006) argued that with the increasing complexity of fnancial markets, consumer fnancial literacy has become an increasingly critical issue as a larger segment of the population now has to make impor- tant and complicated fnancial decisions. Previous studies have found that Kyoung Tae Kim (ktkim@ches.ua.edu) is an Assistant Professor in the Department of Consumer Sciences at the University of Alabama. Jonghee Lee (jongheelee@kmu.ac.kr) is an Assistant Professor in the Department of Consumer Information Studes at the Keimyung University, South Korea. Sherman D. Hanna (hanna.1@osu.edu) is a Professor in the Human Sciences Department at the Ohio State University. The Journal of Consumer Affairs, 2019 DOI: 10.1111/joca.12287 Copyright 2019 by The American Council on Consumer Interests