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.

     

Examining evidence of financial and credit exclusion in Canada from 1999 to 2005

Changes are occurring in the provision of consumer credit, including the expansion of subprime and some fringe financial services (e.g., payday lending). We link two existing literatures on credit constraint and financial exclusion to assess the impact of these developments on the financial circumstances of low and modest-income consumers. We develop a model that identifies observable measures of credit constraint and financial exclusion and relate them to consumer characteristics and life cycle behaviour. We estimate this model using the two latest Surveys of Financial Security for 1999 and 2005, which provide consistent evidence of credit constraint and financial exclusion through time. We find modest overlap among our measures of financial exclusion, which include a zero balance/no account, credit card refusal, and using a pawnshop. Probit regression is used to investigate the factors influencing the incidence of financial exclusion. The results are similar for 1999 and 2005 and indicate rising incidence of financial exclusion as income and wealth fall, although the relationship is nonlinear such that incidence rises much faster at very low levels of income and wealth. Our analysis also suggests potentially important links between financial literacy, formal education, asset building, and financial exclusion and credit constraint. When we combine the samples, we find statistically significant evidence of growth in the incidence of each indicator of financial exclusion when other factors are held constant. Policy implications may include the strengthening of banking regulations that affect low-income Canadians and the promotion of universal financial literacy.     

Affordable Financial Services and Credit for the Poor

Abstract

The financial services and sources of credit available to poor families affect the rate at which families can be financially empowered through building assets. This paper provides background information on financial services, including credit sources, which are available for low-income people and communities. Also discussed are policies affecting financial markets and promising innovations in delivering affordable financial services to low-income families. Implications for social work education, practice and advocacy are discussed.     

Older Adults’ Receipt of Financial Help: Does Personality Matter?

This study examined the role of personality traits in the receipt of financial help at older ages using the 2006 and 2008 waves of Health and Retirement Study data. An investigation of (1) how the five domains of personality traits (openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism) are associated with the receipt of financial help among older adults and (2) the relationship between personality traits and the source of financial help received was examined. Three sets of probit analyses were conducted. The results indicated that personality can predict financial help and the source of financial help. Specifically, older adults who exhibited relatively higher levels of neuroticism and agreeableness were more likely to receive financial help, whereas those who exhibited relatively higher levels of conscientiousness were less likely to receive financial help regardless of the source. Furthermore, older adults who had relatively higher levels of neuroticism were more likely to help themselves with individual sources such as credit cards whereas agreeable older adults were more likely to receive financial help from family members. These findings have implications for financial counseling, planning and education professionals, public assistance program directors, and policy makers. Understanding the effect of personality on financial decision-making can help with financial planning throughout life and inform outreach efforts for those in need of financial help.     

Research in family financial counseling

Domains of family financial counseling research are proposed in order to establish criteria for assessing research needs in this relatively new field. Identification of the research domains implies progress for an emerging profession. A survey of the family financial counseling research to date is reported. Results of research in several domains are shown to demonstrate how results from empirical studies can contribute to the theory and practice of family financial counseling.Research conducted under the auspices of Agricultural Experiment Station Research Project 01803, Family Economic Problems and Resource Management.Dr. Williams is an Associate Professor in the Department of Consumer Sciences and Retailing, Purdue University, West Lafayette, Indiana 47907. Her Ph.D. was received from Purdue. Current research interests include income adequacy, economic security, financial problems, and financial counseling.     

Parental transfer of financial knowledge and later credit outcomes among low- and moderate-income homeowners

It is well established that acquiring financial skills during childhood is linked with better savings in adulthood. Little is known, however, about the relationship between parental teaching of money management early in life and children's financial outcomes in adulthood. This is particularly true for low- and moderate-income (LMI) households. Using data from Community Advantage Program survey data for 2,389 LMI homeowners, we find that adults who report receiving high levels of money-management teaching in childhood from their parents are associated with higher credit scores and lower credit card debt in adulthood. We also find that the level of parental financial teaching influences the relationship between children's later educational attainment and credit scores. These findings suggest implications for initiatives promoting financial capability for parents and children.     

Field Placement and the Impact of Financial Stress on Social Work and Human Service Students

While significant research has been undertaken exploring the pedagogical benefits of undertaking lengthy social work and human services field placements, there has been very little consideration given to the potential financial stress involved for students. This study sought to address this knowledge gap. Research was conducted in 2014 using quantitative and qualitative methods with students and academic and professional staff from six Queensland universities. The findings show a significant relationship between unpaid placements and financial hardship, creating considerable stress for students and at times a compromised placement learning experience. The limited flexibility in requirements from professional bodies and universities for how placements are undertaken has been identified as a key contributor to financial hardship. Addressing the complexities inherent in this issue requires a collaborative effort from multiple stakeholders and should not be regarded as a problem for students to endure and manage.     

CREDIT COUNSELING AND CONSUMER CREDIT TRAJECTORIES

Nonprofit credit counseling provides consumers with financial education, individualized financial counseling, and debt restructuring. Despite potential benefits, relatively little is known about its efficacy. This study uses administrative data to assess the relationship between counseling and consumer credit outcomes. We estimate difference‐in‐difference models to analyze credit outcomes for a counseled group relative to a matched comparison group for six quarters after a baseline period. We find evidence of a substantial credit shock around the time of counseling. Post‐treatment, counseling is associated with a persistent reduction in debt even after accounting for bankruptcies, foreclosures, debt charge‐offs, or participation in debt consolidation programs. (JEL D12)     

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.     

Assisting Parents and In‐Laws: Gender,Type of Assistance,and Couples’ Employment

We use 1995 MIDUS data (n = 2,085) to assess whether the gender gap in help persists across different types of help (unpaid task assistance, emotional support, financial assistance) to parents and in‐laws. We also examine whether joint employment patterns influence levels of help. Persistent gender differences are identified in levels of emotional support to parents and in‐laws: Women spend more time than men giving this help. There are no gender differences in levels of unpaid task assistance or financial assistance to parents or in‐laws. Individuals in single‐earner couples, however, provide greater levels of unpaid task assistance to in‐laws and financial assistance to parents than individuals in dual‐earner couples. Furthermore, financial assistance to parents is positively linked to work hours.     

Effects of Caregiving on Employment and Economic Costs of Chinese Family Caregivers in Canada

A telephone survey with 339 randomly selected Chinese Canadian caregivers examined the employment and economic costs of family caregiving for the elderly. Although the Chinese culture places a strong emphasis on filial obligation, caregiving is not without economic consequences. Caregiver’s age, financial adequacy, and employment, caring for an additional care receiver, and levels of assistance in Activities of Daily Living (ADL), were the predictors for economic costs perceived by family caregivers. Caregiver’s age, caring for an additional care receiver, and care receiver’s financial adequacy were significant predictors for male caregivers. Caregiver’s financial adequacy and higher levels of assistance in ADL were the predictors for female caregivers. Policies to support family caregivers should not just focus on the social aspect, but also the financial needs.     

Practice and Research in Career Counseling and Development—2012

This annual review of the 2012 career development/vocational psychology literature includes 191 empirical (69%) and conceptual (31%) articles from career, counseling, development, and international journals. The review is divided into 4 major areas: professional issues, work and well‐being, life‐span perspectives, and career theory and concepts. Subsumed within these clusters are foci on the status of career/vocational guidance around the globe, the career development experiences of immigrants, and the effects of economic stress. The authors offer three summarizing impressions. First, the 2012 collection is definitively global; this is a credit to the individual and institutional dimensions of the counseling profession. Second, the research articles represent a wide array of methodological approaches, and researchers have made wise research design choices for their areas of inquiry. Third, there is a true professional responsiveness to the needs of the world. It is suggested that the 2012 literature reflects Parsons's early vision of social justice and multiculturalism.     

Strengthening Senior Tax Credit Programs in Massachusetts

Summary

In the last decade, property taxes have increased, creating a financial burden on senior homeowners. In Massachusetts, senior property tax credit programs have arisen to address this problem, as well as to provide cost-effective volunteer assistance for municipal departments, offer seniors meaningful work that otherwise would not have been attempted, and foster involvement in municipal government among seniors. The success of the programs in retaining senior homeowners in the community remains to be evaluated. Program specifics are detailed, policy options are considered, and recommendations are made to strengthen existing programs and assist replication.     

A Survey of Campus Peer Counseling Activities

Abstract

The directors of counseling services at 200 colleges and universities were contacted by mail and asked to complete a survey regarding peer counseling activities on their campuses. One hundred fifty-six responses to this questionnaire were received; one hundred twenty-two indicated ongoing peer counseling activities in a wide variety of settings at their respective campuses. The most common client concerns confronted by peer counselors involved academic difficulties and relationships with friends and lovers. The survey identified a variety of peer counseling training programs, from one-weekend, intensive encounter-type experiences to full-year credit courses in counseling and therapy. Also examined were the funding resources available for peer counseling centers, which often proved quite marginal, and the amount of interaction between student counselors and professional mental health service staff members. Although the authors have been able to uncover a great many peer counseling programs on college campuses, there is a dearth of systematic research evaluating the effectiveness of the services provided by these centers or the appropriateness of various peer counselor training programs. Such work should be encouraged.     

Young Mothers’ Experiences of Receiving the Baby Bonus: A Qualitative Study

The year 2014 marked the abolition of the Baby Bonus and its replacement with a substantially reduced parenting payment. While often criticised as “middle-class welfare,” or publicly denounced due to its purported misuse by disadvantaged mothers, this paper argues that the Baby Bonus provided valuable financial assistance to families experiencing high financial stress. To investigate young women's experience of receiving the Baby Bonus, 19 semistructured interviews were conducted with young mothers in Melbourne who had recently had babies. Many were experiencing financial stress and this payment provided much needed financial support for the basic costs arising from having a baby. Several mothers perceived work as a luxury that was out of reach due to high childcare costs relative to their earning capacity and therefore saw Paid Parental Leave as a further privilege unavailable to them. Our results suggest that while the concerns of policymakers to achieve the best use of scarce resources are critical, it should also be acknowledged that the policy change may have serious implications for many young mothers and may exacerbate disadvantage, and young mothers’ sense of alienation, ultimately leading to greater inequalities.     

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.

从第三方支付发展看上海国际金融中心建设

互联网时代第三方支付的发展,揭示了企业"控制用户信息流以控制支付流,控制支付流以控制资金流;获得用户网络接入权胜过获得资本所有权,获得数据投入量胜过获得资金投入量"的新规则。大平台日益成为金融机构控制用户信息流、获得用户网络接入权的重要载体,在平台组合上加载信用有关数据流日益成为形成金融机构风险管理能力的重要生产资料。在互联网时代推进上海国际金融中心建设,既要继续重视金融机构集聚,更要注重鼓励企业赢得全国性用户网络接入权,加强平台组合,增强信用数据流。上海应依托自贸试验区推进互联网金融监管创新;牵头建立长三角征信联盟集团公司;搭建本地金融机构网聚平台。     

From tackling poverty to achieving financial inclusion—The changing role of British credit unions in low income communities

This paper offers an analysis of the changing role of co-operative credit unions in tackling poverty and promoting financial inclusion in Britain. It examines the reality of poverty in low income communities and endeavours to critique the actions, methodologies and initiatives currently being adopted by credit unions to achieve financial inclusion. It examines the role of the UK government in its support for credit unions and offers an early analysis of HM Treasury's Financial Inclusion Fund. The paper argues that credit unions are best placed within the financial services industry to make an impact within financially excluded communities.     

Does the composition of financial services in a community relate to an Individual’s savings account ownership?

This study extends research on financial inclusion by exploring the composition of financial services within communities. Using propensity-score-adjusted probit regression, we explored associations with savings account ownership using restriscted-access, cross-sectional data from the 2015 National Financial Capability Study with merged financial services and community demographic data. Living in communities where the density of banks and credit unions outnumbered that of alternative financial services was associated with lower-income households’ greater probability of owning a savings account, all else being equal. These results have implications for efforts aiming to improve financial inclusion.     

Wife's role in monthly insurance expenditures

This study investigates the wife's role in monthly insurance expenditures of couples who have been married almost 13 years. Although previous research has shown that husbands dominate decisions about insurance, this study indicates that wives are involved in monthly expenditures for insurance. A wife's involvement is greater if she is less sex-role traditional, if her earnings are lower, if her husband's earnings are lower, if her husband's parents shared financial roles, if she perceives that net worth increased over the past 3 years, if she expects finances to be worse off in 3 years, and if she has a high school diploma or less. Involvement also increases with increases in number of children. Further research is essential in enhancing women's economic well-being.This study was a part of Project No. 60-0362 of the Agricultural Experiment Station, College of Agriculture, University of Illinois at Urbana-Champaign. University of Illinois Survey Research Laboratory services were used in preparation of the data tapes. The author wishes to thank Lauren J. Leach for assistance with data preparation.Vicki Schram Fitzsimmons is Assistant Professor, Division of Family & Consumer Economics, University of Illinois, 905 S. Goodwin Avenue, Urbana, IL 61801. Her research areas include family financial management, economic well-being, and household production. She received her Ph.D. from the University of Illinois.