Consumer Behavior Towards Credit Card Usage

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Journal of Management and Marketing Research

Consumers and credit cards: A review of the empirical literature Phylis M. Mansfield Penn State University – Erie Mary Beth Pinto Penn State University – Erie Cliff A. Robb University of Alabama ABSTRACT Research in the area of consumer credit card attitude and behavior has provided an abundance of literature in the business, psychology, and public policy fields. Beginning in the 1960s, the work revolved around descriptive characteristics and evolved as scholars probed deeper by investigating relationships between credit cards and psychological constructs, and the onships need for consumer policy. While the scope of credit card research has broadened, there is a need to pause and reflect on what we actually know about the phenomenon, given its proclivity in society. This paper identifies the empirical research conducted over the past four decades in order to provide insights and recommendations for additional research. A total of 537 refereed journal articles from 8 databases were reviewed and evaluate within specific parameters related evaluated thin to credit cards, with a final working sample of 103 journal articles published between 1969 and 2012. Emerging trends are identified and suggestions for future research are provided. Keywords: research paper, literature review, consumer credit cards

Consumers and credit cards, Page 1

Journal of Management and Marketing Research INTRODUCTION Ubiquitous in society, credit cards have become a fact of life for most consumers and are a part of the consumer culture. Staggering credit card statistics provide evidence of their pervasiveness. As of 2011, seventy-seven percent of US adults owned at least one credit card, with a total of 1.4 billion cards in circulation. The average cardholder owned 7.7 cards and uses a credit card 119 times a year charging an average of $88 per transaction or $10,500 annually (myFICO, 2012). By the end of 2011, with the unfolding of America’s economic crisis, the average household credit card debt reached $16,420 (Federal Reserve G.19 March, 2012). The proliferation of credit cards and their ease of access have given consumers increased opportunities for making credit purchases. However, while many consumers are able to use credit cards wisely, others seem to be unable to control their spending habits. Over the past two decades, the use of credit cards has become an area of economic and social concern. The problems created by credit card usage have caused apprehension among educators, consumer advocates, and public policy administrators. Economic concerns have risen in part, as a response to the massive use of credit cards and the accumulation of debt in American society. The most striking feature of this trend in U.S. household indebtedness is the rise of personal bankruptcy (Ladka 2011; Manning, 2000). More than 1.35 million people filed for Chapter 7 or Chapter 13 bankruptcy in the United States during 2011, which equates to approximately one in every 175 adult Americans (American Bankruptcy Institute, 2010). This number was lower than 2010 but the bankruptcy rate is expected to rise again during 2012 (Atrizadeh, 2012). Credit card debt has been reported as the main reason causing Americans to file for personal bankruptcy (Murray & Light, 2010; White, 2007). With regard to social concerns, the use of credit cards in society has affected not only traditional consumers, but also vulnerable groups, such as college students, senior citizens, and disabled citizens. College students have grown up in the age of credit, becoming independent consumers earlier in life, and constantly exposed to new products and services available through credit cards. Along with technology and the expansion of the Internet, they became an appealing demographic group for credit card companies and financial institutions for a variety of reasons. Solicitation on college campuses has caused concern among college officials,...
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