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.     

Credit Card Use and Compulsive Buying Behavior

ABSTRACT

Compulsive buying behavior is a negative form of behavior that leads to overspending. In the current study, the author examines the applicability of a compulsive buying behavior scale developed by Valence et al. (1988) with Indian consumers. Compulsive buyers are likely to relate money to power, success, and status. Compulsive buyers perceive their purchases as a way of overcoming negative self-esteem and anxiety. The influence of consumers’ attitude toward credit cards, demographic factors, and credit card use on compulsive buying was studied. The findings suggest the compulsive behavior scale should be modified in the Indian context. Age, income, education, and marital status influence compulsive buying. Consumers’ attitude toward credit cards did not affect compulsive buying.     

Who pays your debt? An important question for understanding compulsive buying among American college students

Compulsive buying, defined as the inability to control purchasing behaviour, is higher among college‐aged students than it is among the general public. The present study examined the factors related to compulsive buying among college students and how those factors differ as a function of who paid the majority of their debt: themselves or their parents. A total of 628 undergraduates from the US completed a questionnaire containing items to measure compulsive buying, personality and financial responsibility. Results revealed that variables predictive of compulsive buying varied depending on the amount of credit card debt that the student was personally responsible for paying. Findings have implications for reducing compulsive buying in college students.     

A cross‐cultural and cross‐gender analysis of compulsive buying behaviour's core dimensions

This study seeks to address the disagreement in the literature about compulsive buying behaviour's (CBB) dimensional structure and tests for cross‐cultural and cross‐gender invariance in young British, Chinese, Czech and Spanish consumers using structural equation modelling. The results show that CBB has two compulsive dimensions: Compulsive Purchasing (CP) and Self‐control Impaired Spending (SIS). These dimensions are cross‐culturally invariant, although the influence of SIS on CBB is higher in more developed countries, particularly among females. The confirmation of the SIS dimension and the external validity of the CBB construct established through the cross‐cultural invariance in CBB dimensions indicate that screening tools should be revised accordingly. The SIS dimension has possibly been previously misinterpreted as impulsive and/or as spontaneous buying and may explain the higher incidence of CBB among female consumers.     

Using the Life Course Paradigm to Explain Mechanisms That Link Family Disruptions to Compulsive Buying

This research examines compulsive buying as an impulse‐control disorder, a form of maladaptive behavior believed to have its roots in early‐in‐life experiences of family adversities. Unlike previous research that has typically studied only the effects of family divorce on compulsive buying, this study examines the effects of disruptive family events within the broader multitheoretical life course framework. A sample of 327 young adults is used to test the hypothesized relationships derived from the main life course perspectives. The results show alternate paths leading to compulsive buying, beyond those uncovered in previous studies. By offering a broader overarching framework, the article shows how previous efforts to study compulsive buying can be improved, pointing to the value of the multitheoretical life course approach in understanding consumption phenomena .     

Contingent Self‐Esteem,Self‐Presentational Concerns,and Compulsive Buying

The present study investigates the influence of contingent self‐esteem (CSE) on compulsive buying tendencies. It is argued that this influence is mediated by the self‐presentational concerns of fear of negative evaluation (FNE) and the importance of social identity (SI). These core propositions are tested using a multimethod approach that includes a survey of 402 US adults and two experiments with 160 and 243 subjects, respectively. Survey results find that CSE's impact on compulsive buying is fully mediated by FNE and SI. The two experiments deepen understanding of this effect. Only under high levels of anxiety do those high in CSE exhibit compulsive buying. High CSE leads to higher FNE and SI regardless of anxiety levels, but only at high anxiety levels do FNE and SI lead to compulsive buying. The study's results increase understanding of the role and process by which CSE impacts compulsive buying in adults of all ages.     

Determinants of indebtedness among young adults: Impacts of lender guidelines,explicit information and financial (over)confidence

For most people, borrowing money is a necessary aspect of life in the 21st century. Wisely handled, loans give consumers access to consumption too expensive for most individuals to purchase with cash, such as homes and cars. However, history shows that taking on too much debt can be detrimental for the individual consumer as well as society as a whole. In this paper, we investigate determinants of over‐indebtedness among young adults. We perform three studies in a setting focused on buying and borrowing money for a home. We show that, compared with an overall mortgage amount, explicit information about monthly payments reduces the tendency to take on too much debt (Study 1), that the amount borrowed depends on standards regarding the loan amount communicated through guidelines from the lender (Study 2), and that borrowers who are overconfident about their financial abilities tend to borrow more than less confident individuals (Study 3). These determinants and their policy implications are discussed.     

The Love of Money, Satisfaction, and the Protestant Work Ethic: Money Profiles Among Univesity Professors in the U.S.A. and Spain

This study tests the hypothesis that university professors (lecturers) (in the U.S. and Spain) with different money profiles (based on Factors Success, Budget, Motivator, Equity, and Evil of the Love of Money Scale) will differ in work-related attitudes and satisfaction. Results suggested that Achieving Money Worshipers (with high scores on Factors Success, Motivator, Equity, and Budget) had high income, Work Ethic, and high satisfaction with pay level, pay administration, and internal equity comparison but low satisfaction with external equity comparison. Careless Money Admirers (high Success but low Budget) had low intrinsic job satisfaction and low satisfaction with pay level and life. Apathetic Money Managers (low Evil and low Motivator) had the highest intrinsic job satisfaction and life satisfaction. Money Repellent Individuals (high Evil and low Success) had low income, work experience, Work Ethic, and low satisfaction with pay administration. Money does not provide the same motivation for people in all four money profiles. Results are discussed in light of the effectiveness of using money to reward people with different money profiles, intrinsic motivation, and unethical behavior.     

A cross-cultural examination of the aetiology of attitudes towards money

Few cross-cultural studies have been conducted on the aetiology of attitudes toward money. Such research becomes more important with increased international economic exchange. This study compares attitudes towards money in Great Britain and the U.S.A. The purpose was to replicate Furnham's British study made in 1984 using the Money in the Past and Future Scale (MPFS) with an American sample to provide a cross-cultural comparison. Analysis of Variance (ANOVA) was used to determine which of the sociodemographic variables were related to respondent attitudes toward money in the past and future. Differences in the MPFS were found between the two countries. The origin or aetiology of these differences in attitudes towards money can be, in part, attributed to cultural differences that begin in the context of the family and are reinforced by society.     

Compulsive Buying Among College Students: An Investigation of Its Antedecents,Consequences, and Implications for Public Policy

This study is an investigation of the incidence, antecedents, consequences, and public policy implications of compulsive buying among college students, a segment of the 44 million Americans born between 1965 and 1976, known as the Baby Bust generation. Previous research involving a broader range of adult consumers resulted in estimates of one to six percent classified as compulsive, buyers. Using Faber and O'Guinn's (1992) clinical screener for compulsive buying, six percent of the college students sampled were classified as compulsive buyers, thus indicating the need for better understanding of compulsive buying behavior in this segment of the Baby Bust generation. Various contributing factors, including familial, psychological, sociological, and demographic influences, are detailed. Of particular interest is the relationship between credit card use and compulsive buying. Implications for consumer policy are discussed, and suggestions for research are offered.     

The role of time preference and credit card usage in compulsive buying behaviour

College students represent a lucrative market for businesses selling a wide array of goods and services, including credit. One area of concern regarding credit debt is its association with compulsive buying behaviour. This study analysed compulsive buying behaviour within an economic framework using a college student sample. Data were collected from 7342 students enrolled in a major Midwestern university. Regression analysis revealed that income, rate of time preference, money attitudes, credit card usage and gender were significantly related to compulsive buying. This study provides useful information for developing, or revising, university policies regarding financial education and counselling, as well as curriculum considerations.     

Compulsive consumption behaviours: investigating relationships among binge eating,compulsive clothing buying and fashion orientation

Compulsive buying and binge eating are examples of compulsive consumption behaviours, and for individuals with these behavioural tendencies, appearance and appearance‐related products seem to be of paramount importance. The purpose of this research was to determine if bulimic behaviours, fashion interest and the importance of being well dressed had a causal relationship with compulsive clothing buying. Subjects completed a compulsive clothing buying scale, the binging/control subscale of the Bulimia Test‐Revised and a fashion orientation scale. A path analysis indicated that binging behaviours and fashion interest significantly predicted compulsive clothing buying, while binging behaviours were not significantly related to fashion interest or the importance of being well dressed. Such findings may suggest that female consumers compulsively buy clothing for different reasons and/or motivations.     

Consumers’ personality and compulsive buying behavior: The role of hedonistic shopping experiences and gender in mediating-moderating relationships

Although existing research suggests that personality plays an important role in explaining compulsive buying behavior, there is still potential space to diagnose the theoretical mediational mechanisms underlying these effects or the extent to which these relationships vary across different consumer demographic groups. Indeed, the role of specific personality traits on hedonistic shopping experiences and compulsive buying still awaits an in-depth examination and clarification. Thus, the present research contributes to existing knowledge by: (1) examining hedonistic shopping experiences (HSE) as a mediating mechanism on compulsive buying (CB); and (2) investigating the role of gender as a moderating variable. Using a sample of 363 adults and data derived from the US market, we confirmed the role of hedonistic shopping experiences, a central trait, in mediating the effects of cardinal traits (i.e., neuroticism, extraversion, openness to experience, conscientiousness and agreeableness), on compulsive buying, a surface trait. Specifically, neuroticism, extraversion, openness to experience exerted a more indirect and positive influence on compulsive buying, while conscientiousness and agreeableness showed a stronger direct and negative relationship with hedonistic shopping experiences and compulsive buying. In addition, neuroticism, extraversion, and openness to experience were a stronger driver of compulsive buying for women than for men, while conscientiousness and agreeableness jointly decreased the importance of hedonistic shopping experiences, and more strongly inhibited compulsive buying for women than for men. The research findings offer important theoretical, public policy and marketing implications.     

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.     

Saving Practices of New Canadians from Vietnam and Laos

This study is the first to focus on saving patterns of a growing group of newcomers to Canada—people of Asian origin who arrived as refugees. Data are from personal interviews with 649 Boat People (Chinese Vietnamese, ethnic Vietnamese, and Laotians) who settled in Canada between 1979–81. Saving money was reported by 80 percent, with the usual pattern being to save money left after paying expenses. Main reasons for saving are emergencies and education of children. Nontraditional methods (bank accounts and Registered Retirement Savings Plans) indicate that the newcomers have access to and are using formal financial services. Several variables (i.e., age and marital status) that are usually associated with savings were not significant; but, as in other studies, higher education, satisfaction with income, and employment were associated with having savings. Ethnic differences suggest differing rates of acculturation for this group.     

A Neurological Study of Compulsive Buying Behaviour

The following article describes a study of the neural correlates of compulsive buying. Twenty-six non-compulsive (“normal”) and 23 compulsive buyers were measured using functional magnetic resonance imaging while performing purchasing decisions. The compulsive buyers were selected based on strict criteria, such that they were all undergoing psychotherapeutic treatment due to their buying behaviour. The results show evidence of significant differences between non-compulsive and compulsive buyers regarding brain activity in regions known to be involved in decision making. The findings give a deeper insight into the nature of compulsive buying and are relevant to consumer policy.     

Untangling the relationships between consumer characteristics,shopping values,and behavioral intention in online group buying

This study examines the link among consumer characteristics (price-sensitive behavior, variety-seeking behavior, and compulsive buying behavior), shopping values (utilitarian and hedonic shopping values), and behavioral intention in online group buying (OGB). This study tests usable responses collected by means of mall-intercept systematic sampling from consumers who previously participated in OGB. Structural equation modeling was used to analyze data and test the hypothesized relationships. Findings suggest that price-sensitive and variety-seeking behaviors are significantly related to utilitarian shopping value, whereas price-sensitive, variety-seeking, and compulsive buying behaviors are significantly related to hedonic shopping value. Both utilitarian and hedonic shopping values significantly influence consumers’ OGB intentions. For a successful OGB strategy, Internet marketers and site operators should emphasize the utilitarian shopping value of price saving and selection and introduce the hedonic shopping values of promotions and sensory experiences. This study provides a link between two streams of prior research – that is, consumer characteristics and shopping values. Furthermore, it validates an empirical model whose results can help business practitioners make better-informed marketing management decisions for OGB and help academics and consumers better understand OGB behavior.     

“My Fifty Shoes Are All Different!” Exploring,Defining, and Characterizing Acquisitive Buying

Why does someone buy the tenth pair of black shoes or the fourteenth white t‐shirt? Typically, extreme buying is associated with negative feelings and consequences: issues of self‐control, guilt, and financial problems are common among compulsive, impulsive, excessive buying, fixated buying, and hoarding. However, through two studies, the authors describe “acquisitive buyers,” who exhibit an extreme yet controlled acquisition process for items in a chosen product category. In his/her mind, these items are minutely differentiated and enrich the inventory, and there is logical justification that every purchase enhances his/her preparedness for anticipated specific product use occasions. Materialism, positive perfectionism and variety‐seeking in a particular product category are some of the characteristics of these buyers. The studies also help distinguish acquisitive buying from other types of extreme buying and mainstream buying.     

Money in a “Safe” place: Money anthropomorphism increases saving behavior

Saving has an important impact on consumers’ lives and life satisfaction. However, various indices indicate that consumers do not save enough. This research shows that a simple change in the perception of money by imposing humanlike characteristics (i.e., money anthropomorphism) can significantly increase savings. Specifically, we posit that imbuing money with humanlike characteristics can enhance both saving intention and real saving behavior because humanized money is considered to be capable of experiences such as pain or joy (perception of experiences) and, as a result, is more vulnerable and in need of protection (perception of vulnerability). By inserting money clipart or using first-perception language to describe money, we manipulate money anthropomorphism in six studies. In behavioral studies, we show that these money anthropomorphism manipulations increase real saving behavior by 18%. In addition, several alternative accounts, including warmth perception of money, autonomy toward money, perceived control over money, feeling guilty about spending money, and perceived importance of money, are ruled out. Furthermore, the results show that when the target account to keep money is considered risky, the positive money anthropomorphism on saving disappears. The findings provide important and practical implications for increasing personal savings.