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The Credit Card Use and Debt: Is there a trade-off between compulsive buying and ill-being perception?

Author

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  • Vieira, Kelmara Mendes
  • de Oliveira, Marta Olivia Rovedder
  • Kunkel, Franciele Inês Reis

Abstract

The differential of this paper is to consider that compulsive buying and ill-being perception constructs act in opposite dimensions on credit card use and debt. While compulsive buying leads the individual to a higher credit card usage and therefore more debt, the perception that future financial problems would cause ill-being acts as a controlling force of the credit card use and consequently of the debt. Besides the model development, this study aims to evaluate if the model is suitable for men and women. A survey was conducted with 1831 individuals of three regions of Brazil. Results support the idea that in the purchase decision-making process with credit card, two forces act in opposite directions, while the compulsive buying stimulates usage and debt, the ill-being perception discourages it. However, this trade-off is unbalanced, because the impact of compulsive buying’s coefficients is superior to the ill-being perception ones.

Suggested Citation

  • Vieira, Kelmara Mendes & de Oliveira, Marta Olivia Rovedder & Kunkel, Franciele Inês Reis, 2016. "The Credit Card Use and Debt: Is there a trade-off between compulsive buying and ill-being perception?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 10(C), pages 75-87.
    • Handle: RePEc:eee:beexfi:v:10:y:2016:i:c:p:75-87
    DOI: 10.1016/j.jbef.2016.03.001
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    Citations

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    Cited by:

    1. Büşra Alma Çallı & Erman Coşkun, 2021. "A Longitudinal Systematic Review of Credit Risk Assessment and Credit Default Predictors," SAGE Open, , vol. 11(4), pages 21582440211, November.
    2. Kumar, Satish & Rao, Sandeep & Goyal, Kirti & Goyal, Nisha, 2022. "Journal of Behavioral and Experimental Finance: A bibliometric overview," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    3. Heo, Wookjae & Lee, Jae Min & Park, Narang & Grable, John E., 2020. "Using Artificial Neural Network techniques to improve the description and prediction of household financial ratios," Journal of Behavioral and Experimental Finance, Elsevier, vol. 25(C).
    4. Mette, Frederike Monika Budiner & de Matos, Celso Augusto & Rohden, Simoni F. & Ponchio, Mateus Canniatti, 2019. "Explanatory mechanisms of the decision to buy on credit: The role of materialism, impulsivity and financial knowledge," Journal of Behavioral and Experimental Finance, Elsevier, vol. 21(C), pages 15-21.
    5. Bertran, Maria Paula & Echeverry, David, 2021. "What is the size of credit card debt in Brazil? Reporting Thresholds, Interest Rates and Income Distribution," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    6. Hassad Bin Hassan & Sahadah Hj. Abdullah* & Junainor Bt. Hassan, 2018. "A Conceptual Framework on Social Platform, Compulsive Buying and Responsible Use towards Credit Card Debt among Young Adult," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 30-35:4.
    7. Tomasz Korol, 2021. "Evaluation of the Macro- and Micro-Economic Factors Affecting the Financial Energy of Households," Energies, MDPI, vol. 14(12), pages 1-14, June.
    8. Rahul Khandelwal & Ashutosh Kolte & Nitin Veer & Pratik Sharma, 2022. "Compulsive Buying Behaviour of Credit Card Users and Affecting Factors Such as Financial Knowledge, Prestige and Retention Time: A Cross-sectional Research," Vision, , vol. 26(2), pages 172-180, June.

    More about this item

    Keywords

    Credit Card Use; Credit Card Debt; Materialism; Compulsive buying; Ill-being; Structural Equation Modeling;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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