Discriminating the number of credit cards held by college students using credit and money attitudes

Abstract

Based on previous studies, a credit attitudes scale [Xiao, J. J., Noring, F. E., & Anderson, J. G. (1995). College students’ attitudes towards credit cards. Journal of Consumer Studies, 19, 155–174] and a modified version of Furnham's [Furnham, A. (1984). Many sides of the coin: The psychology of money usage. Personality and Individual Differences, 5, 501–509] Money Beliefs and Behavior Scale [Hayhoe, C. R., Leach, L., Turner, P. R., Gross, P. E., Bass, B., & Xiao, J. J. (1997). College students’ use of credit cards: A descriptive study. In J. J. Xiao, Proceedings of Association for Financial Counseling and Planning Education (pp. 42–45), San Diego, CA, December 1997] were employed to examine college students’ use of credit cards. The money attitudes of obsession and retention and the affective credit attitude were shown to distinguish between students with credit cards and those without credit cards. The money attitude of effort/ability and the cognitive credit attitude distinguished between students with four or more credit cards and students with one to three credit cards. Ordered logistic regression was used to predict students with four or more credit cards. Nine variables were significant predictors: the affective credit attitude, age, the cognitive credit attitude, gender, having taken a course in personal finance, borrowing from friends or relatives, the retention money attitude, use of money as a reward, and preparing a list before shopping (listed in order of significance).

Introduction

Interest in the use of credit cards has received much attention in recent years from members of the financial community and policy makers. Financial planners are interested in understanding how money attitudes relate to investment and savings behaviors. Financial counselors seek to understand more about how and why individuals get themselves into debt. Policy makers want to know why consumer credit card debt and personal bankruptcies have been rising so rapidly. In 1996, the total revolving consumer debt in the United States was $463 billion and 1.2 million Americans filed for bankruptcy (Brobeck, 1997). There is increasing evidence that credit card debt has contributed to the rise in family financial problems and personal bankruptcies (Brobeck, 1997). In the quest to discover why consumer credit card use and debt are increasing it is important to understand an individual’s attitudes towards credit, money and debt.