The Effects of Credit Attitude and Socioeconomic Factors on Credit Card and Installment Debt

Abstract

Most previous research on credit use has examined the effect of socioeconomic and attitude variables without considering the possible correlation among these factors. Also, the studies have not considered whether there is a difference between general and specific attitudes toward credit and the use of credit. This study addresses those problems and includes installment debt as well as credit card debt in the analysis. The study used data from the 1998 Survey of Consumer Finances. The findings show the higher the specific attitude index, the higher the outstanding credit card balances, and the more favorable the general attitude toward using credit, the higher the installment debt. The results suggest the need for greater awareness on the part of consumers and consumer educators on the influence of attitude in the use of credit.

Household Behavior towards Debt in a Challenging Financial Environment: Malaysian evidence

“…Davies and Lea (1995) did a study on the relationship between attitude and debt and discovered that students who were in debt often had a positive attitude on debt. This was also supported by Walker (1996) and Chien and Devaney (2001) who reported significant relationship between attitude and debt.…”

“…Research has revealed that consumer credit behavior is influenced by psychological factors such as attitude and self-control (Davies & Lea, 1995;Livingstone & Lunt, 1992;Tokunaga, 1993). Also, Chien and Devaney (2001) have discovered consumer debt from attitude, economic and demographic variable perspectives. Rutherford and Devaney (2009) have found that the likelihood of being a convenient user of credit cards was affected by attitude variables.…”

Relación entre actitudes hacia el endeudamiento y discrepancia del yo en estudiantes de pedagogía chilenos

“…Una característica propia de este escenario económico y cultural es la emergencia de una cultura de sobreconsumo y por ende de endeudamiento (Chien y DeVaney, 2001), favorecida, por una parte, por una mayor facilidad para el acceso al crédito, y por otra, por la instalación en la población de actitudes de mayor tolerancia y aceptación del endeudamiento, como una forma de acceso hedónico a aquellos bienes y servicios anhelados (Denegri, 2007). De esta forma, el uso del crédito y el endeudamiento se convierten en elementos constitutivos de los procesos de socialización económica familiar y social, presentándose en segmentos de consumidores cada vez más jóvenes (Amar, Abello, Denegri y Llanos, 2007;Denegri, Palavecinos, Gempp y Caprile, 2005;Descouvières, 1998).…”

“…(Zuckerman, 2000). En este campo, la literatura provee evidencia de que los individuos que tienen actitudes más positivas hacia el crédito tienden a usar con más frecuencia el endeudamiento como una forma de satisfacer sus necesidades de consumo (Chien y DeVaney, 2001;Godwin, 1997;Kim y DeVaney, 2001). …”

Credit card spending limit and personal finance: system dynamics approach

“…Students' attitude toward credit card usage can be explained by several factors: ethnic background, gender, living arrangement, parent's credit card use and the number of credit cards owned, education level, money ethic and self-control [6,11].…”