Personality Factors, Money Attitudes, Financial Knowledge, and Credit-Card Debt in College Students
Limitations and future research
Future research should develop and longitudinally assess the efficacy of
financial literacy programs for college students.
At present, there is no standard for educating students about money.
The issue of consumer debt among college students will not be solved through current policies.
There are implications that can be drawn from the current
study.
social desirability may have affected some of our results.
We did not have a broad range of colleges in our study.
Although designed to be comprehensive, time limitations dictated that not all potentially related variables could be included. Future research may wish to examine other personality factors not addressed in this project. Other financial variables also will be of interest in the future.
Results
Predictors of Debt
Attitudes Toward Debt
Getting out of debt
Beliefs about debt and income
Credit-Card Use
Current Financial Status
The Present Study
Hypothesis 4
Those who report greater debt also will report higher levels of stress and lower levels of perceived financial well-being.
Hypothesis 3
The following demographic variables will predict greater debt: larger number of credit cards, more hours worked
each week (to pay off debt), greater spending when students go out on weekends, reported frequency of credit-card use, lower grade point average, greater age, and later year in school.
Hypothesis 2
Higher levels of compulsive spending, materialism, and delay of gratification will predict greater levels of debt. Although no previous studies have reported the influence
of sensation seeking, we hypothesize that those who are easily bored and who seek novel experiences will be more likely to acquire debt.
Hypothesis 1
Financial knowledge will be related negatively to debt and that tolerant attitudes toward debt and credit-card use will be related positively to debt.
Discussion
Future income is clearly important.
As a group, students expected that they would earn more and pay off debt more quickly than the average person.
The role of gender remains unclear.
Most demographic variables, with the exception of age, were not predictive of debt.
Number of hours worked each week and GPA were not significant predictors.
Age is a logical predictor.
Attitudes toward possessions and spending are also important predictors of debt.
The number of credit cards also is related to increases in debt.
Financial knowledge is critical. It is one of the strongest predictors of debt and is also one of the most amenable to change.
Method
Materials and Procedure
Participants were approached in their classes and asked to participate in a cross-campus research study of college students’ attitudes and beliefs on a number of personal topics, including credit cards and credit-card debt.
Psychological measures
The Compulsive Buying Scale
The Materialism Scale
The Delay of Gratification Scale
The Brief Sensation-Seeking Scale
The stress subscale of the Depression Anxiety
Stress Scale
Financial knowledge
Attitudes toward debt
Financial status and credit-card use
The Credit Card Use Scale
The Financial Well-Being Scale
College students with more liberal attitudes toward credit use are more likely to be in debt.
Participants
448 students from five colleges in three states in the midwestern, northeastern, and southern United States.
Factors
Demographic and Situational Factors
The number of credit cards held and the frequency of use
Performance in school
Year in college
The role of gender in debt
Personality Characteristics
Impulse problems
Self-esteem
Locus of control in debt
Financial Knowledge and Attitudes
Possession of a credit card may facilitate spending among students, regardless of debt-tolerant attitudes.
College students may not know much more, but hey have a degree of self-awareness about their lack of knowledge.
High school seniors know little about finances.
