College Students and Credit Card Use: The Role of Parents, Work Experience, Financial Knowledge, and Credit Card Attitudes

This study examined the influence of parental interactions, years of work experience, financial knowledge, credit card attitudes, and personal characteristics on college students’ credit card behaviors (i.e., number of cards and amount of debt). Based on data collected across seven universities (N = 413), we found that students who had parents who argued about finances, were juniors/seniors, and were comfortable making minimum payments were the most likely to have $500 or more in credit card debt and two or more credit cards. In addition, number of credit cards held was the only dependent variable influenced by gender and fear of credit cards. These results highlight the importance of early interventions in the life of college students including involving parents as positive role models.     

Credit Card Ownership Among American High School Seniors: 1997–2008

The purpose of this study is to investigate the rise in credit card ownership rates among high school seniors in the United States. It uses the Jump$tart Coalition’s cross-sectional surveys from 1997 to 2008 to analyze the determinants of credit card ownership among high school seniors. These results show that students with credit cards are less financially literate than students without credit cards; and students with credit cards in their own names are almost twice as likely to work during the school year for money. These findings help make a case for improved financial education and training, and institutional changes that limit the pervasive issuance of credit cards to high school students.     

Credit Card Practices of Vietnamese and Laotian Newcomers to Canada: A 10-year Longitudinal Perspective

This is the first study to follow a group of refugees (N = 647) for 10 years to identify how they acquired and used credit cards, a novel product to them. Acculturation to Canadian credit card use occurred; there was a dramatic increase in having cards (from 4% to 77%). The main reason initially for not having a card was knowledge barriers; later on, attitudinal, such as preferring to pay cash. Variables accounting for credit card use after 4 and 10 years were: being employed with higher income, having a checking account, being married, younger, and more fluent in English. Changing from not having to having a credit card was fostered by remaining (or becoming) married, employed, and good in English.     

Shopping without pain: Compulsive buying and the effects of credit card availability in Europe and the Far East

The financial consequences of compulsive buying are obvious given the large amount of debt reported by compulsive buyers in many studies. Credit cards allow consumers to borrow money very easily in order to satisfy their desire to purchase. In two web-based experiments, we found that compulsive shoppers often overspent and were rarely influenced by price. Their overspending was partially mediated by their excessive use of credit cards. Furthermore, compulsive shoppers were less conscious of their budgets, especially when they used credit cards. They also obtained more pleasure from accomplishing a shopping trip and were more distressed by delayed product delivery than normal shoppers. Finally, compulsive shoppers in Taiwan were more compulsive than those in the United Kingdom: they displayed many of the above symptoms of compulsive buying more saliently.     

Credit Card Debt and the Provision of Financial Support to Kin in the US

Credit card debt stands at over $1 trillion in the US and grows continuously. Scholars have argued that high (and growing) levels of credit card debt are attributable in part to rising economic vulnerabilities, combined with a thinning public safety net, credit cards being increasingly employed to make ends meet in this context. This paper extends this line of work by stressing that individuals and households do not rely on their credit cards only to mitigate their own financial hardships, but also those experienced by their non-coresidential kin members. More specifically, building on the notion that kin networks can constitute a source of negative social capital, we argue that individuals often accumulate credit card debt as they attempt to provide monetary assistance to their relatives in need. We also show that this effect is particularly strong in lower-income groups and in African American communities, in which need levels are especially high. Based on random and fixed effects analyses of data from the Panel Study of Income Dynamics, these insights extend scholarship on both kin networks of support and the sources of credit card debt.

     

Financial Behaviors and Financial Well-Being of College Students: Evidence from a National Survey

The purpose of this study is to explore the relationship between financial behaviors and financial well-being of college students when controlling demographic and financial characteristics, financial education and financial dispositions. Data (N = 15,797) was collected from college students age 18 and over via an online survey from 15 college campuses throughout the United States during spring and fall of 2008. Results of means comparisons showed significant differences on the financial well-being level by various socioeconomic factors and financial behaviors. In addition, regression analysis showed that budgeting, saving, risky credit card behaviors, and compulsive buying were significantly related to financial well-being when controlling for demographic information, financial characteristics, financial education, and financial dispositions.     

High-risk health and credit behavior among 18- to 25-year-old college students

The number of students accumulating credit card debt--and the amount of debt itself--on college campuses is increasing. If high-risk credit and health behavior are associated, health behavior interventions might apply to high-risk credit behavior. OBJECTIVE: The authors' purpose was to examine these possible associations. PARTICIPANTS AND METHODS: They used a retrospective design with existing data from a sample of 45,213 US college students and several ordinal regression models, which corresponded with high priority college health issues. RESULTS: Students with high-risk credit behavior were more likely to have driven after drinking, used amphetamines in the previous 30 days, felt functionally impaired by depression in the previous 12 months, had a higher body mass index (BMI), or had a lower grade-point average (GPA). They were less likely to have participated in vigorous physical activity, used condoms for oral or vaginal sex in the prior 30 days, or used marijuana. The findings support the notion that high-risk health and credit behaviors are associated. CONCLUSIONS: Further research could clarify the nature of this relation.     

WHY DO PEOPLE USE DEBIT CARDS: EVIDENCE FROM CHECKING ACCOUNTS

Debit cards are the fastest growing consumer payment method despite being more expensive and less versatile than credit cards. In this paper, we investigate some of the oft cited explanations for debit card use. Checking account data shows that debit card use is correlated with age, pay frequency, overdrafting, and ATM use, but not income, gender, crime, or expenditure. The data contain some signs that debit cards might be used as a method of spending restraint. (JEL D14, G21, L14)     

Demographics, attitude, personality and credit card features correlate with credit card debt: A view from China

With the help of a commercial bank in China, we studied consumer credit card debt behavior² in correlation with demographics, attitude, personality, and credit card features factors. The study was conducted by using mail-in questionnaires, which were sent to credit card holders who was using or had used either revolving credit or petty installment plans. According to regression functions, we found that demographic variables and credit card features had limited explanatory power compared to attitude variables and personality variables. Specifically, we found that revolving credit use and petty installment use were closely related to attitudes about credit cards, money and debt. Risk attitude efficiently predicted petty installment use; however, it did not correlate with revolving credit use. Personality factors of self-control, self-esteem, self-efficacy, deferring gratification, internal locus of control and impulsiveness were significantly correlated with revolving credit use; on the other hand, sensation seeking, impulsiveness, and deferring gratification were correlated with petty installment use. We also found that some credit card features easily led to an “illusion of income” that facilitated consumer credit card debt behavior.     

Sensation-Seeking,Risk-Taking,and Problematic Financial Behaviors of College Students

College students are at especially high risk for serious financial problems due to easy availability of credit cards, rising tuition, and a declining economy. Arnett (Am Psychol 55:469–480, 2000) proposed 18–25 year olds may be considered emerging adults and are characterized by less stable financial situations than those who perceive themselves to be adults. A survey was given to 450 students at two Mississippi universities. The results showed student financial behaviors were related to age, gender, public assistance, adult status, sensation-seeking, and potential for problem gambling. This study is unique in that it investigated the relationship of emerging adult/adult status and other individual and socio-demographic variables to financial behaviors among college students, a conceptualization that has not been explored in the past.     

Changing College Students’ Financial Knowledge, Attitudes, and Behavior through Seminar Participation

This pilot study examined the influence of Credit Wise Cats, a financial education seminar presented by Students in Free Enterprise, on the attitudes, knowledge, and intentions toward financial responsibility of college students (N = 93). Findings suggest that the seminar effectively increased students’ financial knowledge, increased responsible attitudes toward credit and decreased avoidant attitudes towards credit from pre-test to post-test. At post-test, students reported intending to engage in significantly more effective financial behaviors and fewer risky financial behaviors. Finally, demographic factors (e.g., gender and employment status) predicted students’ financial knowledge, attitudes, and behaviors. These results suggest that a seminar format may be useful in reaching a wider audience of college students and, thus, warrants future longitudinal evaluation.

Imagined interactions,family money management patterns and coalitions,and attitudes toward money and credit

This study explores the imagined interactions college students have with their parents about money and credit, their attitudes toward credit and money, the ways they say their parents deal with financial decisions, and the communication coalitions regarding finances they perceive existing within their family. Students’ imagined interaction pleasantness is greatest when parents jointly form a plan for paying off credit card debt and lowest when parents argue. When family coalitions exist, students report more frequent imagined interactions. Imagined interaction frequency and pleasantness are related to credit and money attitudes.

Correlates of Credit Card Adoption in Urban China

Analysis of data from the 2008 Survey of Chinese Consumer Finance and Investor Education indicated that 30.0?% of the sample households held at least one credit card. Significant factors associated with the probability that an urban Chinese individual would hold a credit card included income, age, education, occupation, and awareness of credit card risks, default consequences, the credit system, and that late payments increase interest.     

The Cost of Not Knowing the Score: Self-Estimated Credit Scores and Financial Outcomes

This study analyzes consumers’ knowledge of their own credit situation and tests whether a lack of knowledge affects financial outcomes. The unique dataset from survey and credit report data includes self-estimates of credit scores and actual scores from a low-to-moderate income sample. We argue and show empirically that many respondents don’t know their credit score and generally underestimate their creditworthiness. Furthermore, our evidence suggests that this biased self-assessment may explain differences in perceived credit constraints and credit contracts, specifically credit card interest rates. Our research suggests that an important aspect of financial literacy is self-assessment, and that it is important to encourage consumers to regularly check their credit reports and scores so as to better understand their actual creditworthiness.     

Negative consequences of alcohol use among college students: victims or victimizers?

Focusing on reciprocity between primary and secondary consequences resulting from alcohol use among college students, this study hypothesizes that college students should not be dichotomously viewed as those who generate alcohol-related negative consequences and those who suffer from the consequences generated by fellow students; instead, since students usually live closely together and most of them use alcohol, they constantly affect one another with consequences of their alcohol use. Five colleges in New York State were randomly selected for the study. The telephone interview method was employed to survey college students during the spring semester of 1998. Within each participating college, students were randomly selected through the use of complete student telephone directories provided by the college administration. A total of 813 students were interviewed. Findings indicate that negative consequences of alcohol use among college students may be understood more in a form of group process than in separate individual circumstances. Through association and interaction with other alcohol users, students are frequently victimizing fellow students and being victimized by others in terms of alcohol-related consequences; the severity of alcohol-related hazard for students, thus, tends to be twice as severe as that for individuals who are not in a college environment.     

Development of Financial Capacity in Adolescents

This study aims to check whether the framework of developing financial capacity of adolescents is similar as that of college students, as well as whether adolescence, compared to college age, is the better age for objective financial knowledge to trigger the positive cycle of developing financial capacity. Using a convenience sample of 967 adolescent students from five Hong Kong secondary schools, this study conducted structural equation modeling to evaluate the development of financial capacity. Both subjective and objective financial knowledge in adolescents can be internalized into financial self-beliefs. Subsequently, these self-beliefs influence their financial behavior. The effect of objective financial knowledge on the financial self-beliefs, which is weak for college students, was much stronger for adolescents. The framework of developing financial capacity of adolescents is similar as that of college students. Adolescence, compared to college age, is the better age for objective financial knowledge to trigger the positive cycle of developing financial capacity.     

Connections with banking institutions and diverse asset portfolios in young adulthood: Children as potential future investors

A central hypothesis of Child Development Accounts (CDA) suggests that savings accounts in childhood lay a foundation for connecting to mainstream banking institutions and diversifying asset portfolios in young adulthood and beyond. While children may have limited savings to invest initially, they are financial actors who may increasingly invest money into different types of savings products over time. This paper uses propensity score weighted, longitudinal data from the Panel Study of Income Dynamics and its supplements to examine the types of financial and nonfinancial assets owned by young adults and whether or not they are more likely to own these assets when they have savings accounts as children. The most commonly owned assets in young adulthood included savings accounts (89%), vehicles (54%) and credit cards (51%). Smaller percentages owned stocks (9%), bonds (6%), and homes (8%). On average, young adults owned two to three different assets. Having savings accounts in childhood was associated with being two times more likely to own savings accounts, two times more likely to own credit cards, and four times more likely to own stocks in young adulthood, compared to not having savings accounts in childhood. Young adults' ownership of more total financial assets was also associated with having savings accounts in childhood. Findings provide some supporting evidence of demand for children's savings accounts. Policy endeavors that remove barriers to account ownership may be advantageous for children and mainstream banks.     

Increased Urge to Gamble Following Near-Miss Outcomes May Drive Purchasing Behaviour in Scratch Card Gambling

Previous research into scratch card gambling has highlighted the effects of these games on players’ arousal and affective states. Specifically, near-miss outcomes in scratch cards (uncovering 2 of 3 needed jackpot symbols) have been associated with high levels of physiological and subjective arousal and negative emotional evaluations, including increased frustration. We sought to extend this research by examining whether near-misses prompted increases in gambling urge, and the subsequent purchasing of additional scratch cards. Participants played two scratch cards with varying outcomes with half of the sample experiencing a near-miss for the jackpot prize, and the other half experiencing a regular loss. Players rated their urge to continue gambling after each game outcome, and following the initial playing phase, were then able to use their winnings to purchase additional cards. Our results indicated that near-misses increased the urge to gamble significantly more than regular losses, and urge to gamble in the near-miss group was significantly correlated with purchasing at least one additional card. Although some players in the loss group purchased another card, there was no correlation between urge to gamble and purchasing in this group. Additionally, participants in the near-miss group who purchased additional cards reported higher levels of urge than those who did not purchase more cards. This was not true for the loss group: participants who experienced solely losing outcomes reported similar levels of urge regardless of whether or not they purchased more scratch cards. Despite near-misses’ objective status as monetary losses, the increased urge that follows near-miss outcomes may translate into further scratch card gambling for a subset of individuals .     

Age, debt and anxiety

What is the association between debt and anxiety? Is the relationship between age and anxiety in part due to financial debt? Recently there has been a renewed interest for the reconceptualization and measurement of socioeconomic status that moves beyond the standard education, occupation, and income. This paper uses credit card debt and stress regarding debt to examine the relationship among age, debt, and anxiety. Using data from a 1997 representative sample of more than 1,000 adults in Ohio, results show that anxiety does increase with the ratio of credit card debt to income, and with being in default; but credit card debt accounts for little of the age-anxiety association. Stress regarding overall debt does explain some of the age effect. In addition, stress also explains some of the effect of the credit card debt to income ratio, and all of the effect of default on anxiety.