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1 – 10 of over 10000Fuzhong Chen, Guohai Jiang and Mengyi Gu
Under the background of low consumer financial knowledge and accumulated credit card liabilities, this study investigates the relationship between financial knowledge and…
Abstract
Purpose
Under the background of low consumer financial knowledge and accumulated credit card liabilities, this study investigates the relationship between financial knowledge and responsible credit card behavior using data from the 2019 China Household Finance Survey (CHFS). From the perspective of consumer economic well-being, this study defines accruing credit card debt to buy houses and cars when loans with lower interest rates are available as irresponsible credit card behavior.
Design/methodology/approach
This study uses probit regressions to examine the association between financial knowledge and responsible credit card behavior because the dependent variable is a dummy variable. To alleviate endogeneity problems, this study uses instrument variables and Heckman’s two-step estimation. Furthermore, to explore the potential mediators in this process, this study follows the stepwise regression method. Finally, this study introduces interaction terms to examine whether this association differs in different groups.
Findings
The results indicate that financial knowledge is conducive to increasing the probability of responsible credit card behavior. Mediating analyses reveal that the roles of financial knowledge occur by increasing the degree of concern for financial and economic information and the propensity to plan. Moderating analyses show that the effects of financial knowledge on responsible credit card behavior are stronger among risk-averse consumers and in regions with favorable digital access.
Originality/value
This study measures responsible credit card behavior from the perspective of the consumer’s well-being, which enriches practical implications for consumer finance. Furthermore, this study explores the potential mediators influencing the process of financial knowledge that affects responsible credit card behavior and identifies moderators to conduct heterogeneous analyses, which helps comprehensively understand the nexus between financial knowledge and credit card behavior. By achieving these contributions, this study helps to curb the adverse effects of irresponsible credit card behavior on consumers’ well-being and the economic system and helps policymakers promote financial knowledge to fully prevent irresponsible credit card behavior.
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By applying the information-motivation-behavioral (IMB) skills model, the purpose of this paper is to examine the direct and indirect effects of credit card knowledge and social…
Abstract
Purpose
By applying the information-motivation-behavioral (IMB) skills model, the purpose of this paper is to examine the direct and indirect effects of credit card knowledge and social motivation on credit card misuse behavior mediated through credit card self-efficacy among college students in the USA.
Design/methodology/approach
A sample of 427 participants was surveyed. Structural equation modeling was used to assess the hypothesized model.
Findings
Credit card knowledge and social motivation were inversely associated with credit card misuse mediated through credit card self-efficacy. Credit card knowledge had a direct negative relationship with credit card misuse. The results confirm the theoretical relationships in the IMB model.
Practical implications
The results offer several implications for bank marketers and policy makers. The IMB model could be used to predict credit card abuse among college students; credit card literacy programs should incorporate strategies that can enhance students’ knowledge, social motivation, and behavioral skills with regard to responsible use of credit cards.
Originality/value
This study is unique in that it applies the IMB model to examine predictors of credit card misuse among college students.
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Jakob Cakarnis and Steve Peter D'Alessandro
This paper investigates the determinants of credit card use and misuse by student and young professionals. Critical to the research is the impact of materialism and knowledge on…
Abstract
Purpose
This paper investigates the determinants of credit card use and misuse by student and young professionals. Critical to the research is the impact of materialism and knowledge on selection of the appropriate credit card.
Design/methodology/approach
This study uses survey research and partial least squares to investigate credit card behaviors of students versus young professionals.
Findings
In a comparative study of young professionals and students, it was found that consumer knowledge, as expected, leads to better consumer selection of credit cards. Materialism was also found to increase the motivation for more optimal consumer outcomes. For more experienced consumers, such as young professionals, it was found that despite them being more knowledgeable, they were more likely to select a credit card based on impulse.
Originality/value
This paper examines how materialism may in fact encourage some consumers to make better decisions because they are more motivated to develop better knowledge. It also shows how better credit card selection may inhibit impulse purchasing.
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Karin Braunsberger, Laurie A. Lucas and Dave Roach
The Federal Reserve Board has recently adopted a final rule amending the Truth in Lending Act's Regulation Z, effective October 1, 2001. The first study investigates how…
Abstract
The Federal Reserve Board has recently adopted a final rule amending the Truth in Lending Act's Regulation Z, effective October 1, 2001. The first study investigates how vulnerable consumers (i.e. college students) might respond to the revised credit card disclosure requirements and investigates credit card knowledge of college students. The second and third studies examine external validity issues, that is, whether urban college students are more knowledgeable about credit cards than rural students, and whether adult populations are more knowledgeable than student populations. These latter studies further investigate the relationships among objective knowledge, subjective knowledge and product usage. The results show that consumers in general are not very knowledgeable about credit cards. In order to avoid government regulation of the industry, it is recommended that credit card issuers become involved in educating consumers.
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Rozaimah Zainudin, Nurul Shahnaz Mahdzan and Ming-Yee Yeap
The concept of “buy now pay later” leads Malaysian Generation Y (Gen Y) to excessively use their credit cards for spending. To gauge the extent of this worrisome scenario, the…
Abstract
Purpose
The concept of “buy now pay later” leads Malaysian Generation Y (Gen Y) to excessively use their credit cards for spending. To gauge the extent of this worrisome scenario, the purpose of this paper is to attempt to investigate the factors, including credit attitudes, knowledge on credit card, materialism, social norm and self-efficacy, that influence credit card misuse amongst Gen Y in Malaysia.
Design/methodology/approach
The authors have collected responses from a total of 501 respondents in two urban areas in Malaysia and estimated six multiple regression models to test five hypotheses.
Findings
The results suggest that credit card knowledge and self-efficacy are negatively related to credit card misuse amongst Gen Y in Malaysia. In contrast, positive relationships were found to exist between credit card attitudes, materialism and social norm and the dependent variable.
Research limitations/implications
In this study, the authors limit the data collection to the two biggest urban areas in Malaysia, namely, Klang Valley and Ipoh.
Practical implications
For the regulator’s perspective, the results can be used to understand the alarming indebtedness behaviour amongst working members of Gen Y and outline appropriate and effective policies to reduce their serious indebtedness. Financial service providers, however, can collaborate with regulators to curb credit card misuse amongst Gen Y, so that the latter can avoid high bad debt from line of credit facilities and bankruptcy.
Originality/value
The study’s findings will further enrich the existing literature on the factors affecting the credit card misuse, especially for the unique Gen Y cohort in Malaysia.
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Jacquelyn Warwick and Phylis Mansfield
Given the proliferation of the credit card industry in today’s US households, and the aggressive promotional tactics employed to get college students to sign on as customers, this…
Abstract
Given the proliferation of the credit card industry in today’s US households, and the aggressive promotional tactics employed to get college students to sign on as customers, this exploratory study takes a look at the credit card activity of college students at one Midwestern campus. The majority of students surveyed did not report knowledge of their credit card interest rate, although approximately half did report knowing their credit balance and credit limit. Students appear to have a realistic attitude toward the use of credit cards.
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Karin Braunsberger, Laurie A. Lucas and Dave Roach
In the USA, the Federal Reserve Board (FRB) has adopted a final rule amending the Truth in Lending Act's Regulation Z, effective October 1, 2001. The present study aims to use the…
Abstract
Purpose
In the USA, the Federal Reserve Board (FRB) has adopted a final rule amending the Truth in Lending Act's Regulation Z, effective October 1, 2001. The present study aims to use the elaboration likelihood model to explore how consumers might respond to the revised credit card disclosure requirements, focusing specifically on college students.
Design/methodology/approach
Each subject was randomly assigned to one of two financial scenarios and asked to choose, among competing offers, the credit card that presented the “best” match to the scenario. Subsequently, all subjects completed measures designed to test hypothesized relationships within the framework of the elaboration likelihood model.
Findings
College students possess a fairly low level of knowledge of credit cards and thus are not very well equipped to make educated choices concerning such cards.
Research limitations/implications
The use of a rural student sample is a limitation and future research should investigate different populations, including those in urban and international markets.
Practical implications
Since the variable APR information appears to distract consumers from taking into account other important cost information, credit card issuers should develop solicitations that aid consumers in making knowledgeable choices.
Originality/value
The present research is the first to investigate the impact of the FRB's recently adopted final rule amending the Truth in Lending Act's Regulation Z. The findings should thus be of interest to regulators, credit card issuers, and consumer advocates.
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Yam B. Limbu and Shintaro Sato
By testing a moderated mediation model, the purpose of this paper is to examine the mediating role of credit card self-efficacy in the relationship between credit card literacy…
Abstract
Purpose
By testing a moderated mediation model, the purpose of this paper is to examine the mediating role of credit card self-efficacy in the relationship between credit card literacy and financial well-being. The authors further examine if credit card number moderates this effect.
Design/methodology/approach
Data for the study were collected from 427 college students. The PROCESS macros in IBM SPSS Statistics 23 was used to assess the hypothesized relationships.
Findings
Credit card literacy positively influences financial well-being through self-efficacy. However, this effect is stronger when college students own fewer credit cards.
Practical implications
Banks and credit card issuers, policymakers and colleges and universities should place a greater emphasis on credit card literacy programs that enhance students’ general understanding of credit card terms and conditions and confidence in their ability to effectively use and manage their credit cards.
Originality/value
To our knowledge, this is the first study to examine the relationship between credit card literacy, self-efficacy and financial well-being.
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Andreas Papadopoulos and Graham Brooks
This paper aims to examine the “effectiveness” of the Cyprus police in investigating credit card fraud.
Abstract
Purpose
This paper aims to examine the “effectiveness” of the Cyprus police in investigating credit card fraud.
Design/methodology/approach
In total, 19 semi‐structured interviews with key criminal justice personnel were undertaken to assess the current capacity of police in investigating credit card fraud.
Findings
The paper discovers that a far more co‐ordinated approach is needed to tackle credit card fraud in Cyprus, with a lack of specialised knowledge of fraud a major concern.
Research limitations/implications
All interview schedules were sent before the interviews took place and three of the respondents provided written responses only.
Originality/value
This is the first study of its kind that involved primary research interviewing 19 key personnel involved in policing credit card fraud in Cyprus.
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Tania Morris, Lamine Kamano and Stéphanie Maillet
This article describes financial professionals' perceptions of their clients' financial behaviors and the explanatory factors underlying these behaviors.
Abstract
Purpose
This article describes financial professionals' perceptions of their clients' financial behaviors and the explanatory factors underlying these behaviors.
Design/methodology/approach
In this qualitative research, the authors seek to understand financial professionals' experiences in relation to how their clients manage their own finances. The authors conduct and analyze 26 semi-structured interviews with financial professionals from several industries within the financial sector in Canada.
Findings
The professionals in this study noted that despite their clients' financial knowledge, several other factors can explain these individuals' financial behaviors. They include psychological factors (such as financial bias, the need for instant gratification, and the lack of awareness regarding the long-term effects of certain types of financial behaviors), financial habits (such as lifestyle, financial planning and lack of discipline) and the financial system's flexibility with respect to debt financing and repayment. These perceptions are categorized according to whether they are related to debt financing or repayment, savings or investments.
Originality/value
By using a qualitative methodology that relies on the perceptions of financial professionals, this study aims to better understand the financial behaviors of individuals and households, and these behaviors' underlying factors. This study's findings could be useful to various stakeholders interested, in one way or another, in financial literacy, such as organizations aiming to strengthen and promote financial literacy, educators, researchers, regulatory bodies of financial institutions and financial advisers.
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