Discriminating the number of credit cards held by college students using credit and money attitudes☆
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.
Section snippets
Credit and debt attitudes research
College students’ attitudes toward credit were measured by Xiao, Noring and Anderson (1995). The researchers developed a Likert summated rating scale composed of a series of statements relating to credit cards. Fifteen of the statements related to feelings about credit cards (affective), ten statements dealt with knowledge (cognitive) and twelve statements related to usage of credit cards (behavioral). Findings indicated that college students had favorable attitudes towards credit. Of those
Purpose
The purpose of this study is to examine both credit and money attitudes held by college students to determine how these attitudes influence the number of credit cards students hold. As research has shown, credit and money attitudes are good indicators of an individual’s spending patterns, perceived economic well-being, and acceptable debt level (Davies & Lea, 1995, Hayhoe & Wilhelm, 1998, Tokunaga, 1993, Wilhelm & Varcoe, 1991, Xiao et al., 1995). The current study will contribute to the base
Participants
The participants in this study were college students over the age of 18 who attended one of five state sponsored universities during the Spring 1997 semester. The universities participating in this study are the University of Kentucky, Kansas State University, State University of New York College at Oneonta, the University of Northern Iowa and the University of Rhode Island. Students at these universities come from all socioeconomic levels.
Five hundred students at each university were randomly
Descriptive statistics results
The results of the t-tests were as follows. Students who reported not having credit cards were more likely to score higher on the money attitudes of obsession (p < 0.03) and retention (p < 0.01) and lower on the affective credit attitude (p < 0.001) as compared with students with credit cards. Students with 4 or more credit cards were more likely to score higher on the effort/ability money attitude (p < 0.02) and the cognitive credit attitude (p < 0.01) than students with 1–3 credit cards. See Table 1
Discussion and implications
Results show that students with four or more credit cards scored higher on the affective credit attitude. Students without credit cards do not feel an emotional `high' (affective) using credit cards. This supports the findings of Xiao et al. (1995) that students with credit cards score higher on the affective credit attitudes. The cognitive credit attitude and the retention money attitude were also significant which is consistent with the hypothesis that money and credit attitudes do affect
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Some of the descriptive results in this study were reported at the Eastern Family Economics – Resource Management Conference, February 1998. The ordered logistic regression analyses are only presented in this article.