Acquisition mode and credit card overspending behavior: An empirical analysis of the credit card industry

Although credit card overspending behavior has become a critical societal concern with severe negative impacts on consumer welfare and economic stability, research on credit card overspending behavior remains fragmented and understudied. This study investigates new types of antecedents of credit card overspending behavior that are overlooked in the prior literature—the acquisition mode of credit card companies. Based on data set from a large commercial bank in China, this study measures credit card overspending behavior using consumption amount, cash withdrawal amount and overdueness, and suggests that gift acquisition has a positive effect on cash withdrawal amount and overdue probability as well as a negative effect on consumption amount. Furthermore, we find that this relationship could be weakened for female customers and for customers with higher education levels. This study provides theoretical implications for both the credit card overspending literature and customer acquisition literature. It also has important implications for consumer welfare and public policymaking.     

Consumer Vulnerability and Credit Card Knowledge Among Developmentally Disabled Citizens

This study represents an exploratory investigation of credit card knowledge among one vulnerable consumer segment—the developmentally disabled. The results suggest that many of the individuals did not understand the complexity of credit card products and were not able to make reasoned assessments of financial concepts and credit terms. A little knowledge (learning) is a dangerous thing. —Alexander Pope, 1709     

A look inside: teacher information search for personal finance instruction

Drawing on the information search perspective of the consumer behaviour literature, this study assesses the predictors of teacher information search. Using qualitative and quantitative methods, the case of personal finance instruction is examined. Findings suggest three levels of involvement in information search among personal finance teachers. Participation in continuing education courses, combined with a heightened interest in personal finance, were the strongest predictors of a high‐information strategy. The findings speak to the usefulness of continued teacher training that is sensitive to information acquisition behaviour.     

What’s in a Score? Differences in Consumers’ Credit Knowledge Using OLS and Quantile Regressions

Credit literacy depends, in part, on understanding credit reports and scores. The U.S. Government Accountability Office conducted a study in 2004 to assess consumers’ knowledge of credit reports, credit scores, and the dispute resolution process. This study uses the Government Accountability Office data and estimates a series of ordinary least squares and quantile regressions to identify specific subgroups of the population that could benefit from more targeted consumer policies and financial education. The findings from this research have important implications for consumer educators, financial professionals, and policy makers, especially with respect to national strategies designed to improve consumers’ financial well‐being.     

Is transparency a good thing? How online price transparency and variability can benefit firms and influence consumer decision making

The internet has empowered consumers and changed the way they search and shop for products and services by increasing the availability and transparency of pricing and other comparative information. However, what is less clear from a managerial perspective is just how transparent pricing information should be. While it might seem that increasing price transparency would reduce consumer search, we find that it may actually increase search and delay. In this article, we review the use of firms’ application of price transparency in practice and propose that specific types of information can influence how transparent prices are to consumers, and how such transparency can influence consumer decisions in a way that is beneficial for the firm. We focus on a specific form of transparency: whether or not the consumer knows the range of pricing. We also discuss whether a high variability pricing approach versus a low variability pricing approach influences consumer decision making—and whether this influence is moderated by transparency.     

Cognitive and attitudinal effects of technical advertising copy: the roles of gender,self-assessed and objective consumer knowledge

The roles of two constructs of consumer knowledge — self-assessed product knowledge and objective product knowledge — are examined in an experiment in which consumers read ads for high-tech products containing high and low levels of technical language. Interactions between gender and the two consumer knowledge measures were also explored. Self-assessed knowledge was a better predictor of participants. Cognitive responses and general attitudinal evaluations. Objective knowledge, on the other hand, was a better predictor of ratings for specific product attributes. These differential results are considered with respect to the role of technical language in consumer information search strategies.     

The use of small instant loans among young adults – a gateway to a consumer insolvency?

The aim of this paper is to study 18‐ to 29‐year‐old Finnish consumers' use of instant small loans (i.e. SMS loan) and other consumer credit services that have increased notably in the past few years. We examine what kind of expenditures instant credit is used for and focus also on young consumers' financial situation and their perceptions of themselves as money handlers. The research method is quantitative, and data are derived from an open online survey (n = 1610). Our results reveal that consumer credit is used by young people in all income brackets and employment positions. However, there is a clear connection between certain life‐course stages (young, single parent), financial positions (low income), employment situations (marginal) and the propensity to take instant loans and consumer credit. The young people who take an instant loan once are likely to do it again. Typical purposes of use included buying alcohol, cigarettes and partying. For some consumers, the use of small loans is part of controlled and economical use of money. However, particularly in the low‐income brackets, it is also common to buy food and to repay credit or interest. Young people, who use instant loans recognize flaws in their money management and see themselves as ‘wasteful’ consumers more often than those who do not use instant loans. On the basis of this empirical study, it is unquestioned that young people's consumer education needs to be strengthened. In Finland, this need has already been recognized in both consumer policy and teacher education.     

Stopping Identity Theft

Each year, millions of consumers are victimized by identity theft—the practice of using the identity of another to obtain credit. After the identity thief defaults, lenders and credit bureaus attribute the default to the impersonated consumer. The article draws on the traditional loss allocation rules of the common law to suggest ways to reduce the incidence of identity theft. Lenders and credit bureaus do not at present have a sufficient incentive to avoid attributing the acts of identity thieves to consumers. The piece argues that consumers should have a claim against creditors and credit bureaus for including the transactions of identity thieves in reports on impersonated consumers. That would give the credit industry—the entity that can avoid the losses at the lowest cost—an incentive to take steps to prevent identity theft. Finally, the article briefly reviews current law and suggests some implications for public policy.     

Money Attitudes,Credit Card Use,and Compulsive Buying among American College Students

The consumer culture has evolved into one of the most powerful forces shaping individuals and societies (Roberts and Sepulveda 1999 a, b). The desire to become a member of the consumer culture appears to be universal (Droge and Mackoy 1995). Changing attitudes toward money are an important catalyst behind the spread of the consumer culture. Money is important—especially to American college students who have been raised in a credit card society where debt is used freely (Ritzer 1995). Schor (1998) believes that access to easy credit is one of the causes of overspending. Using a causal modeling approach, the present study investigated the role money attitudes and credit card use play in compulsive buying within a sample of American college students (see Figure 1). Findings suggest that the money attitudes powerprestige, distrust, and anxiety (Yamauchi and Templer 1982) are closely related to compulsive buying and that credit card use often moderates these relationships. Study results have important public policy, marketing, and research implications.     

Financial literacy and the cost of borrowing

This research investigates the relation between financial literacy and the cost of borrowing via credit cards and mortgage loans among US consumers. This is a departure from previous studies that have focused on levels of debt in relation to human capital, either financial knowledge or education. Data from the Consumer Finance Monthly (CFM) survey are used to specifically examine the effect of financial literacy on borrowing rates for credit cards and mortgages controlling for other human capital influences. The CFM is a national survey, rich in American consumer credit information, and includes a comprehensive instrument specifically designed to measure financial literacy. Results indicate that those who are financially literate are about twice as likely to have lower costs of borrowing for both credit cards and mortgage loans.     

Lessons from Credit Bureaus for Improving the Market for Electronic Medical Records

Electronic medical records (EMRs) have tremendous potential to lower consumer medical costs and improve quality, yet their use in the United States remains extremely low. We explain the reasons for this market failure and then document the strikingly parallel problems in the lending market one hundred years ago. We investigate how the evolution of credit bureaus helped address market limitations in lending, and ask whether similar entities—what we call health information bureaus—might overcome similar problems in EMR adoption and interconnection.     

Co-operation among groups in developing and delivering programmes to consumers

The purpose of this study was to investigate the feasibility of co-operation among consumer education providers, in developing and delivering education programmes for consumers. Four groups of consumer education providers were identified for this study: business representatives, consumer advocates, government agencies and secondary school educators. Members of each group were presented with a series of 42 objectives which had been grouped into eight categories. They were asked to identify the importance of each objective and providers were compared according to their responses. Similarities and differences among consumer education providers were identified and statistical tests applied. Three objectives identified as most important by participants were: (i) developing guidelines for wise use of credit; (ii) identifying the rights and responsibilities of the consumer in our society; and (iii) establishing the essential factors in the developing of a budget. The median test identified significant differences (P < 0.05) between consumer education suppliers in the importance they assigned to consumer education objectives in three categories. Spearman rank-difference correlation test identified objectives within seven categories of objectives for which consumer educators expressed similar importance. These findings indicate sufficient agreement among consumer educators' importance ranking of objectives to indicate support for co-operative educational programmes.     

Credit card use and knowledge in Thailand

This study examined the relationship between demographic characteristics of Thai credit card holders and the extent of credit card use, the level of credit card knowledge and the consumer choice perspectives. Data were collected by phone interview from Bangkok Bank credit card holders. Chi-square and Cramer's V were used to analyse the data. Only income and occupation were statistically related to credit card use. The results revealed that Thai credit card holders were not knowledgeable about credit card terms. They were influenced by environmental stimuli and society and group norms when they chose their credit card. They lacked sufficient information to make an informed choice when they applied for their cards. Implications for consumer educators and policy makers in developing nations are discussed.     

Online information search termination patterns across product categories and consumer demographics

While accessing information online, consumers exhibit differences in their patterns of search, that is, time spent per search episode and search frequency. The search patterns vary across both consumer characteristics and product categories. We empirically investigate consumer online information search termination patterns, and relate the differences to product categories and consumer characteristics. Findings of such an empirical study would be useful for planning communication strategies, website design, etc. The model is calibrated on empirical data collected through online surveys. We find that consumer learning occurs when consumers search across search goods, but not when they search across experience goods.     

消费信贷对经济增长的影响研究——以青海为例

近年来,我国消费信贷的规模不断扩大,基于鼓励消费的独特作用,消费信贷已成为促进我国经济增长的重要手段。本文利用青海省1995—2018年的时间序列数据,包括消费信贷余额与GDP,使用VAR模型来论证消费信贷与经济增长之间的关系。通过实证分析表明,青海省消费信贷的发展确实会促进经济增长,但由于诸多因素的存在,消费信贷对经济增长的促进效果并不太明显。基于此,本文提出一些相关的政策建议来促进青海消费信贷的发展从而更好地促进青海经济的发展。     

Credit cards,new technology and consumer debt*

There has been a rapid expansion in consumer indebtedness in the U.K. The amount of consumer debt has doubled in real terms during the last 10 years. The majority of consumers are able to cope with their debt repayments, but there are a significant number of credit casualties, often burdened with multiple debts. Credit cards have played a significant but not overwhelming part in this increase in debt. There are now 62 bank credit cards for every 100 adults in the U.K., a much higher incidence than in any other European country. Credit cards have been aggressively marketed and sold, and it is possible that they will now move downmarket, to consumers in lower income groups. This possibility highlights the need for a major consumer education campaign on the cost of credit. U.K. consumers' knowledge of and ability to compare credit interest rates is poor, especially among lower income consumers who are most at risk.     

Consumer credit and monetary policy in Malaysia

What is the impact of monetary policy on the Malaysian consumer? The study addresses this issue by empirically investigating the consequences of interest rate shocks on consumer credit in Malaysia. The study relies on the impulse response functions and the variance decomposition analysis based on the structural Vector Auto‐regression methodology. Apart from analysing the responses of aggregate consumer loans (ACL) to interest rate changes, further disaggregation is made in efforts to arrive at more detailed findings. In particular, the ACL data are categorized into loans for purchase of residential property, loans for personal uses, loans for credit cards, loans for purchase of consumer durables, loans for purchase of passenger cars and loans for purchase of securities. Through this disaggregation, the study shows the relative sensitivity of the various types of consumer loans to interest rate shocks.     

Effect of consumer self‐confidence on information search and dissemination: Mediating role of subjective knowledge

Consumers search for information about products to make a satisfactory purchase decision and gain knowledge about new features and updates. Consumers also use this knowledge to be vocal about their product experience because several consumers seek interpersonal recommendations. This phenomenon has contributed to the emergence of information search (IS) and information dissemination (ID) as a key research area in the field of consumer behaviour. However, the role of personal factors such as consumer self‐confidence and subjective knowledge has received little attention in the extant IS and ID literature. The major argument of this study is that information acquisition confidence and social outcome confidence enhance subjective knowledge and consequently increase the will of consumers to search and disseminate information in the context of smartphone buyers in India. Structural equation modelling was employed to test the proposed hypotheses using a convenience sample of 259 consumers obtained through a cross‐sectional survey. The study shows that subjective knowledge is crucial in strengthening the association between consumer self‐confidence and consumer intention for IS and ID. Additionally, enhancing consumer’s social outcome confidence contributes towards high subjective knowledge and consequently accelerates information dissemination. Results suggest that firms could focus on enhancing the social outcome confidence and subjective knowledge of consumers to motivate them to disseminate information. The results also show that consumers with high confidence in information acquisition ability have the high subjective knowledge and are more likely to search for information. Overall, this study contributes to the emerging literature regarding the role of personal factors in IS and dissemination behaviour.     

Debt Judgments as a Reflection of Consumption-Related Debt Problems

In connection with the strengthening and enlargement of financial markets, i.e., financialization, financial services and products play a major role in the everyday lives of consumers. One drawback of this trend is the increase in the number of debt problems. The data used in this article consist of Finnish district-court judgments related to debt that in most cases was consumption-related, and register-based data on debtors. We first compare debtors to the entire population of Finland by age, gender, marital status, and education, and also in different age groups. The focus then turns to the four most common types of debt in the judgments (based on consumer credit, operator services, distance selling, and credit card debts), and how age, gender, marital status, and education related to these debt types. According to the results, consumers under 30 years of age, in particular, men, those with a basic level of education, and the divorced were over-represented in the data, compared to the overall Finnish population. Young single adults were particularly likely to have accrued smaller amounts of debt related to instant loans and operator services, whereas more extensive consumer credit as well as credit card debt tended to be a problem among retirees. Credit card debt, as well as debts to lending firms, were more common among those with tertiary education than among those with a basic education. Overall, the adverse effects of financialization focused especially on young people with a low level of education. The results also indicate that legislation could partly reduce the negative effects of financialization.

     

Mobile Commerce Website Success: Antecedents of Consumer Satisfaction and Purchase Intention

With the rapid development of apparel mobile commerce in the United States, more companies view mobile commerce as a new source of competitive advantage. Despite the importance of apparel mobile website quality and its effect on consumer satisfaction and future purchase stimulus, extant research has paid little attention to these topics. This study proposes a website quality–consumer satisfaction–purchase intention research model based on the self-regulatory process theory. Six dimensions of apparel mobile website quality—website visual appeal, apparel visual appeal, brand trust, website information quality, website response time, and website security—were investigated. In all, 293 eligible responses were collected via an online survey. Multiple regression analysis was utilized to test the proposed relationships. Results reveal that website information quality, website visual appeal, apparel visual appeal, and website security positively affect consumer satisfaction toward apparel mobile commerce websites, while website response time and brand trust show insignificant impacts on consumer satisfaction. With higher satisfaction on an apparel mobile commerce website, consumers are more likely to purchase apparel through the website.