Determinants of credit card debt: Differentiating between revolving credit debt and petty installment loan in China

Wang, Lili; Malhotra, Naresh K.; Lü, Wei

doi:10.1002/cb.1474

Cited by 17 publications

(25 citation statements)

References 31 publications

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“…Women decidedly less frequently have outstanding commitments that should be collected by a collection agency (Wiltshire et al, 2011). Women are also less likely to have a revolving loan account than men (Wang et al, 2014). In terms of financial decisions, women exhibit debt aversion (Carter et al, 2007).…”

Section: Literature Reviewmentioning

confidence: 99%

Gender differences in financial behaviours

Walczak

Pieńkowska-Kamieniecka

2018

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The assessment of the impact of gender on financial decision-making was based on a representative survey 'Social Diagnosis 2015' conducted on a sample of over 34 thousand Polish citizens. When realising the research objective, a logistic regression model was appliedboth with and without interaction effects. The study has shown that the financial behaviours of men and women differ significantly. Men more frequently use the products and services available on the financial market such as, for instance, a debit card, or invest funds in shares or bonds. They are also more willing to take risks. However, as has been shown in the study, gender is not the only important variable influencing financial decisions. Equally important are age, social and professional status, education, or place of residence. This indicates that analysing behaviours on the financial market based solely on one variable may not be appropriate.

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Section: Literature Reviewmentioning

confidence: 99%

Gender differences in financial behaviours

Walczak

Pieńkowska-Kamieniecka

2018

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“…LOGIT model is an alternative choice if the normality assumption is violated. Given the binary nature of the dependent variable, the PROBIT econometric model is adopted following the empirical literature (Jamal & Goode, ; Honkanen, Svein, & Oystein, ; Hsu and Han‐Peng, ; Veloutsou & Bian, ; Wang, Malhotra, & Wei, ). Intuitively, the model assumes that the choice variable is a nonlinear function of the determinant variables, but within the nonlinear function, there is a linear relationship among the variables:

Pr ((),, y_{i} = 1 (|,, {boldx}_{i})) = normalΦ ((),, x_{i} boldβ + ε_{i}) = normalΦ ((),, β_{0} + β_{1} x_{1 i} + β_{2} x_{2 i} + \dots + β_{K} x_{Ki} + ε_{i}) .

…”

Section: Methodsmentioning

confidence: 99%

Religious heterogeneity of food consumers: The impact of global markets upon methods of production

White

Samuel

Zhou

et al. 2017

J of Consumer Behaviour

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The production and distribution of food is a topic of perennial interest. Specific concern arises over the provision of foods that have been prepared in accordance with religious requirements because they place additional demands and constraints upon methods of food production and distribution. This paper explores the attitude of consumers towards the method of production of food that has been prepared in accordance with the requirements of their own and other faiths. Consumer's gender, age, education level, and the degree of respondent religiosity are all found to be influential. Furthermore, the assumption that such foods are acceptable to nonreligious people is flawed.This study advances our understanding of the role of religiosity upon consumer behaviour. It makes a unique investigation of attitudes towards food that has been prepared in accordance with religious requirements and finds that consumer religion is an important demographic but that the degree of religiosity and other attitudes, such as those towards animal husbandry, are also important factors that need to be taken into account during production and retailing.Such polydoxicity has implications for marketing systems concerned with the production and consumption of religiously prepared foodstuff. This research concludes that religious consumers are a highly heterogeneous group. Although interfaith differences may be obvious and expected, intrafaith differences also exist.

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“…Payment delinquency rates, for example, are likely to be affected by variables such as the card holder's location, age or gender (Wang et al, 2011;Agarwal and Liu, 2003;Stavins, 2000). In China, the overall volume of credit card delinquency rose sharply from $1.15bn by the end of 2009 to $3.73bn by the end of 2013 (Wang et al, 2011(Wang et al, , 2014. During 2014-2016, card payments overdue by six months or more increased from 1.43 to 1.53 per cent of the total outstanding card debt (Lockett, 2015;Reuters, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…Drentea and Lavrakas, 2000;Ekici and Dunn, 2010;Kara et al, 1994;Norvilitis et al, 2003;Roberts and Jones, 2001;Wilcox et al, 2011). To date, attempts to explain the various consumer credit utilisation patterns, particularly credit card use, have resulted in at least three major streams of research: identification of credit card users; exploration of the factors that influence the intensity of credit card use and the factors that differentiate debtors and non-debtors; and the determinants of debt repayment amounts and decisions (Kamleitner and Kirchler, 2007;Livingstone and Lunt, 1992;Wang et al, 2011Wang et al, , 2014. A number of more recent studies have also drawn attention to credit card use in developing countries, particularly China (e.g.…”

Section: Introductionmentioning

confidence: 99%

Determinants of credit card spending and debt of Chinese consumers

Lin

Revindo

Gan

et al. 2019

IJBM

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Purpose The rapid growth of credit card use in China poses the potential for card overuse and the accumulation of increased debt. The purpose of this paper is to report on an investigation into the determinants of overall credit card spending and card-financed debt by Chinese consumers. Design/methodology/approach This study focusses on two dependent variables: credit card monthly spending and card debt. The spending measure is based on consumer outlay for the month preceding the survey. Card debt is the consumers’ outstanding credit card debt when the survey was conducted. Three groups of independent measures are used: socio-demographic characteristics, card features and consumer attitude towards money. Both card spending and card debt are estimated with OLS methods. Data was obtained from the 2013 China Household Finance Survey of 1,920 households in 29 provinces and 262 counties across China that used credit cards over the survey period. Findings The empirical findings suggest consumers’ attitude towards money is more important in explaining card spending and debt variation than socio-demographic characteristics and card features. The credit limit set for a card, obligations to other loans and the method of paying for ordinary shopping exhibit positive effects on both card spending and card debt, while age exhibits a negative effect. Further, card spending is positively correlated with card debts, but the factors that determine card spending do not necessarily affect card debt and vice versa. Minimum card debt payments, cash advances, card tenure and interest-bearing debt have no effect on card spending but have positive effects on card debt. In addition, gender and income have opposite effects on card spending and debt. Practical implications The relationships we have documented suggest several actions the Chinese Government could consider dealing with credit card debt risk. Controlling the aggressive promotional campaigns that card issuers use to attract consumers and aggressive credit policies should be a focus of attention. The Chinese Government might, for example, impose minimum age and income requirements for granting credit cards and prohibit issuance of new cards to applicants who are already in debt with other types of credit. In addition, more stringent criteria to curb increases in card limits and tighter control over cash advances made on cards should be applied. Minimum payment amounts can also be increased in order to reduce credit card debt risk. Originality/value Despite ample documentation of consumers’ credit card behaviour, the literature is deficient in at least two areas of enquiry. First, most previous research has investigated either credit card spending behaviour or card debt, but not both. Second, with few exceptions, most research has investigated a range of specific factors that affect credit card use. In contrast, this study investigates card spending as well as card debt behaviour using a wide variety of consumer dimensions particularly relevant to credit card use and resulting debt. In addition, this study focusses on Chinese consumers, who traditionally prefer to save first and delay spending. The impact of the rapid growth of credit card use on this traditional Chinese orientation towards spending is dynamic. Documenting the influence of the individual factors examined in this study is likely to be of value to both policy makers and institutions that offer and manage credit in this changing environment.

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Determinants of credit card debt: Differentiating between revolving credit debt and petty installment loan in China

Cited by 17 publications

References 31 publications

Gender differences in financial behaviours

Gender differences in financial behaviours

Religious heterogeneity of food consumers: The impact of global markets upon methods of production

Determinants of credit card spending and debt of Chinese consumers

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