Personality Factors, Money Attitudes, Financial Knowledge, and Credit‐Card Debt in College Students¹

Abstract

The issue of credit-card debt among college students has received increasing attention. This study explored factors hypothesized to be causes and effects of credit-card debt in 448 students on five college campuses. Students reported an average of $1,035 (SD 5 $1,849) in debt, including students without credit cards or credit-card debt. Lack of financial knowledge, age, number of credit cards, delay of gratification, and attitudes toward credit-card use were related to debt. Sensation seeking, materialism, the Student Attitude Toward Debt scale, gender, and grade point average were not unique predictors of debt. Students reporting greater debt reported greater stress and decreased financial well being. Results highlight the need for comprehensive financial literacy education among college students.Credit-card debt among college students has become an increasing concern in recent years. Newspapers and magazines cover the topic on a regular basis, and legislators seek ways to stem the tide of indebted students. Although there is a great deal of data indicating that students are in debt, little is known about why students fall into debt. The present study explores the relative weight of personality factors, attitudes toward money and possessions, and financial knowledge as predictors of credit-card debt among college students.

An Exploratory Study of Personal Financial Wellbeing Determinants: Examining the Moderating Effect of Gender

“…Assessment of research findings have revealed that young adults, especially college students fail to manage their expenditure and therefore fall into financial strain. Previous studies related to students' financial management have shown that upon entering university, students have more access to credit cards and therefore experience high level of stress due to high debt, and most have financial problems and perceive low level of satisfaction with their financial situation (Holub, 2002;NellieMae, 2002;Norvilitis et al, 2006;Norvilitis, Szablicki, & Wilson, 2003). However, these problems may be rooted in a low level of financial knowledge and the high effect of friends and media on students' financial behaviour and negative attitude toward money (Norvilitis & Santa Maria, 2002;Roberts & Jones, 2001).…”

“…Chen and Volpe (1998) conducted a study of financial practices among college students and their findings indicate that financial knowledge has positive and significant effect on students' financial management. Researchers in the field of financial education (Hilgert & Hogarth, 2003;Norvilitis et al, 2006;Perry & Morris, 2005) reviewed previous findings and concluded that financial literacy is one of the most important determinants of financial management among college students.…”

Factors Influencing College Students’ Financial Behaviors in Turkey: Evidence from a National Survey

“…In a study focusing on psychological variables, Norvilitis, Merwin, Osberg, Roehling, and Kamas (2006) investigated the factors affecting credit-card debt in 448 students from five US universities. Older students, students with more credit cards and those who are less knowledgeable about financial issues reported a higher amount of credit card debt.…”

A Bourdieusian Perspective on Acculturation: Mexican Immigrants in the United States

“…Better educated individuals will be more resourceful, in searching for, and using quality information, which may be positively related to higher quality investment decision-making [30,31]. Similarly, education is positively related to socio-economic development [32] and it has been considered a crucial component of cultural capital [7,12].…”