TY - JOUR

T1 - Consumer susceptibility to credit card misuse and indebtedness

AU - Awanis, Sandra

AU - Cui, Charles C.

PY - 2014

Y1 - 2014

N2 - PurposePrior research suggests that payment mechanisms are imbued with cues that affect purchase evaluation and future spending behavior. Credit cards are distinguished from other payment mechanisms as they elicit greater willingness to spend, prompt weaker recollections of past credit expenses and overvaluation of available funds – a phenomena the authors call as “credit card effect.” Little is known about the individuals’ differential exposure to the credit card effect. The purpose of this paper is to present a new concept and measure of susceptibility to the credit card misuse and indebtedness (SCCMI).Design/methodology/approachThe study focused on young credit card users (aged 18-25) from Malaysia, Singapore, and the UK as they represent varying levels of credit card issuance and consumer protection regulations. The authors conducted confirmatory factor analysis and invariance tests to assess the validity, reliability and parsimony of the proposed scale in the three countries. Further, the authors examined the prediction power of SCCMI on consumer tendency to become a revolving credit card debtor.FindingsResults show that the SCCMI scale is valid, reliable and parsimonious across the multi-country context. The paper provided additional validity support through known-group comparison among various payers of credit card bills.Research limitations/implicationsThe convenience sampling used for the study is the main limitation. The findings bear important implications for more socially responsible marketing practice and better public policies in credit carder regulation for protecting young credit card users.Practical implicationsThe new concept and measurement scale can be used for identifying the vulnerable individuals in credit card use, assisting consumer knowledge training, improving policies for credit card regulation, and helping credit card providers in socially responsible marketing practice.Social implicationsThe cross-country validity of the SCCMI scale provides a unique contribution for monitoring and auditing consumer vulnerability in credit card misuse in Asian and European market conditions.Originality/valueSCCMI offers an original concept that is distinct from previous research in that SCCMI focusses solely on the state of likelihood to commit credit card abuse rather than the behavioral manifestations of credit card misuse. SCCMI provides a new tool for marketers and public policy makers for ethically responsible credit card marketing and regulation to protect youths’ benefits.

AB - PurposePrior research suggests that payment mechanisms are imbued with cues that affect purchase evaluation and future spending behavior. Credit cards are distinguished from other payment mechanisms as they elicit greater willingness to spend, prompt weaker recollections of past credit expenses and overvaluation of available funds – a phenomena the authors call as “credit card effect.” Little is known about the individuals’ differential exposure to the credit card effect. The purpose of this paper is to present a new concept and measure of susceptibility to the credit card misuse and indebtedness (SCCMI).Design/methodology/approachThe study focused on young credit card users (aged 18-25) from Malaysia, Singapore, and the UK as they represent varying levels of credit card issuance and consumer protection regulations. The authors conducted confirmatory factor analysis and invariance tests to assess the validity, reliability and parsimony of the proposed scale in the three countries. Further, the authors examined the prediction power of SCCMI on consumer tendency to become a revolving credit card debtor.FindingsResults show that the SCCMI scale is valid, reliable and parsimonious across the multi-country context. The paper provided additional validity support through known-group comparison among various payers of credit card bills.Research limitations/implicationsThe convenience sampling used for the study is the main limitation. The findings bear important implications for more socially responsible marketing practice and better public policies in credit carder regulation for protecting young credit card users.Practical implicationsThe new concept and measurement scale can be used for identifying the vulnerable individuals in credit card use, assisting consumer knowledge training, improving policies for credit card regulation, and helping credit card providers in socially responsible marketing practice.Social implicationsThe cross-country validity of the SCCMI scale provides a unique contribution for monitoring and auditing consumer vulnerability in credit card misuse in Asian and European market conditions.Originality/valueSCCMI offers an original concept that is distinct from previous research in that SCCMI focusses solely on the state of likelihood to commit credit card abuse rather than the behavioral manifestations of credit card misuse. SCCMI provides a new tool for marketers and public policy makers for ethically responsible credit card marketing and regulation to protect youths’ benefits.

KW - Debt

KW - Measurement scale

KW - Consumer vulnerability

KW - Credit card

KW - Susceptibility

U2 - 10.1108/APJML-09-2013-0110

DO - 10.1108/APJML-09-2013-0110

M3 - Journal article

VL - 26

SP - 408

EP - 429

JO - Asia Pacific Journal of Marketing and Logistics

JF - Asia Pacific Journal of Marketing and Logistics

SN - 1355-5855

IS - 3

ER -