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Credit Card Debt: Nescience or Necessity?

Author

Listed:
  • G. Gulsun Akin

    (Department of Economics, Bogazici University)

  • Ahmet Faruk Aysan

    (Department of Economics, Istanbul Sehir University)

  • Sezgim Dasdogen

    (Department of Economics, Istanbul Sehir University)

  • Levent Yildiran

    (4 Department of Economics, Bogazici University)

Abstract

This paper attempts to assess whether the driving factor behind the rising credit card indebtedness of consumers in Turkey is financial illiteracy. Using the results of a nationwide survey, the authors conclude that even though credit card borrowing frequency and debt amount are affected by components of financial literacy, being credit-constrained has a very pronounced impact. An exploratory analysis finds that the probability of irrational credit card borrowing is increased by being credit-constrained but not affected by financial literacy. These findings suggest that credit card debt is at least as much a result of necessity as nescience.

Suggested Citation

  • G. Gulsun Akin & Ahmet Faruk Aysan & Sezgim Dasdogen & Levent Yildiran, 2019. "Credit Card Debt: Nescience or Necessity?," Working Papers 1315, Economic Research Forum, revised 21 Aug 2019.
    • Handle: RePEc:erg:wpaper:1315
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    References listed on IDEAS

    as
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