Credit Card Knowledge, Attitudes, And

CREDIT CARD KNOWLEDGE, ATTITUDES, AND PRACTICES OF COLLEGE STUDENTS by ROSITA MOORE, B.A., M.A. A DISSERTATION IN FAMILY AND CONSUMER SCIENCES EDUCATION Submitted to the Graduate Faculty of Texas Tech University in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY Approved Co-^airperson of the Committee Co-Chairperson of the Committee —f *-*—*—^— Accepted Dean of the Graduate School August, 2004 © 2004, Rosita Patricia Welch Moore ACKNOWLEDGMENTS I would like to express my sincere thanks and appreciation to Dr. Sue Couch and Dr. Ginny Felstehausen, co-chairs of my doctoral committee, for their guidance, support, and encouragement throughout this long process. Their ability to work well as a team and their individual strengths were invaluable in helping me complete this project. I wish to extend special thanks to the other members of my committee, Dr. So-Hyun Joo, Dr. Sue Reichelt, and Dr. C. Kenny Wu, for their expert advice and encouragement. I especially wish to express my gratitude to Dr. Wu for unselfishly giving of his time on evenings and weekends to provide advice and assistance. Special thanks go to Dr. Godwin Ashiabi, from the University of Missouri Extension, who freely gave of his time and expertise as a statistical advisor. I deeply appreciate his patience and guidance throughout this learning process. My sincere thanks and appreciation go to Dr. Julie Middleton (University of Missouri Extension) and Dr. Barbara Williamson (University of Missouri- Columbia), whose willingness to hold me accountable made the completion of this dissertation possible. Without them I would not have stayed the course. I extend special thanks and appreciation to my "family" from Cornerstone Bible Church: Dr. Richard Grubbs, Dan and Sue Hanna, Condoy and Wanda Hill, and Christopher and Lori Robinson. Their love and care for me, upon my return to Lubbock after an absence of four years, was a wonderful demonstration of Christian love. They provided accommodation, meals, transportation, and above all friendship, encouragement, support, prayers, and a belief that I could do it. I am especially grateful to Dr. Grubbs, my pastor and friend, who has encouraged and supported me from the very beginning of the doctoral program and whose unfailing belief in my ability to succeed has been a great inspiration. I could not have succeeded without his support. Special thanks also to Dan Hanna for his provision of a place to study, a laptop, office supplies, and data entry assistance. His incredible generosity made my success possible. I also wish to express my thanks to the many friends and family who have given me support, encouragement, and assistance in various ways. Special thanks to Jim and Marilyn McMillian, Tom and Beverly Sowell, Dr. Lori Yoo, Wesley Ingram, Juel Gibbons, Stacy Foster, Melody Zink, and Jacque Zuniga. Most importantly, my deepest gratitude goes to my husband, Dr. C. L. Wayne Moore, for his tremendous love and support. He has been a source of inspiration and encouragement to me throughout this process and an invaluable help in countless ways. His great desire for me to succeed kept me from giving up, and his belief in my ability was constant. I am extremely grateful for his love and for all the sacrifices he made to help me complete the Ph.D. program. Finally, I am thankful to my God and Savior for His provision of the stamina and strength to endure, the ability to succeed academically, and the love and support of my husband and friends. I am deeply grateful for His care. Ill TABLE OF CONTENTS ACKNOWLEDGMENTS ii ABSTRACT vi LIST OF TABLES viii LIST OF FIGURES xi CHAPTER I. INTRODUCTION 1 Statement of the Problem 4 Purpose of the Study 6 Components of the Deacon and Firebaugh Framework 7 Research Questions 7 Definition of Terms 9 Basic Assumptions 12 Limitations of the Study 12 II. REVIEW OF LITERATURE 13 Theoretical Framework 13 History of Credit Cards 24 Current Trends 29 Research on Credit Card Users 36 Summary 53 METHODS AND PROCEDURES 55 Research Design 55 Design and Development of the Instrument 57 Selection and Description of the Sample 60 Data Collection 62 Data Analysis 62 Summary 70 IV. ANALYSIS AND INTERPRETATION OF DATA 72 Characteristics of the Sample (Input Variables) 72 Descriptive Statistics of the Throughput Variables 78 Descriptive Statistics of Output Variables 85 IV Results Related to the Research Questions 91 Summary 135 V. SUMMARY, FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS 142 Summary of the Study 142 Summary of the Findings 147 Conclusions and Discussion 157 Recommendations for Further Research 169 REFERENCES 172 APPENDICES A. COLLEGE STUDENT CREDIT CARD SURVEY In pocket B. LETTER TO PROFESSORS/INSTRUCTORS 178 C. LETTERS OF PERMISSION 181 ABSTRACT Widespread use of credit cards by college students has raised questions about students' ability to manage their finances effectively. Parents, counselors, college administrators, and others have expressed concern that young people lack the necessary skills to handle the cards which credit card companies are making increasingly accessible to college students. The purpose of the proposed study was to obtain and analyze data on the credit card behavior of undergraduate students enrolled at a major state- supported university in the southwestern United States, with an enrollment of approximately 27,000. Based on a revised theoretical framework of the Deacon and Firebaugh model of family resource management, this study sought to depict interrelationships between students' socio-demographic background (input), college students' credit card knowledge and college students' credit card attitudes (throughput); and college students' credit card practices (output). Data were collected for the study in fall 2003 from a convenience sample of 2,113 undergraduate students representing the nine colleges on campus. The survey instrument used for data collection was developed by the researcher after a literature search yielded no suitable existing instrument. A review of questionnaires used in previous studies on college students and credit cards, as well as communication with researchers, generated concepts and questions for the development of an instrument. The questionnaire consisted of 39 questions VI requiring a variety of responses, including true/false, ranking, fill in the blank, and rating on a Likert-type scale. Descriptive statistics were applied to determine how participants acquired credit cards, their reasons for using credit cards, and the types of purchases made with credit cards. In addition, descriptive statistics identified where students had obtained their knowledge of personal finance/money management principles; college students' attitudes toward financial education and counseling; and college students' credit card, student loan, and other consumer debt. Stepwise multiple regression analyses were conducted to examine the relationships between the following: college students' socio-demographic characteristics and college students' credit card knowledge and attitudes (input to throughput variables); college students' socio-demographic characteristics and college students' credit card practices (input to output variables) and between college students' credit card knowledge and attitudes and college students' credit card practices (throughput to output variables). A path analysis was used to test the conceptual model. VII LIST OF TABLES 3.1 Definition of Variables Used in Multiple Regression Analyses 65 3.2 Factor Loadings for Questionnaire Item #13—Reasons Why College Students Use Credit Cards 67 3.3 Factor Loadings for Questionnaire Item #7—^Types of Credit Card Purchase Items 68 4.1 Socio-Demographic Characteristics of the Sample 73 4.2 Socioeconomic Background of the Sample 74 4.3 College Students' Level of Credit Card Knowledge 79 4.4 Attitudes of College Students Who Use Credit Cards 81 4.5 Mean Values for Responses to Attitudes toward Use and View of Credit Cards Scale 82 4.6 Mean Values for Responses to Acquisition and Use of Credit Cards ... 84 4.7 Students' Attitudes toward Acquisition and Use of Credit Cards 85 4.8 Descriptive Statistics of the Output Variable 86 4.9 College Students' Reasons for Not Having Credit Cards 86 4.10 Reasons College Students Acquire Credit Cards 92 4.11 Reasons College Students Use Credit Cards 94 4.12 College Students'Level of Credit Card Use 95 4.13 College Students'Cash Advance Purchases 96 4.14 College Students' Sources of Financial Knowledge 98 4.15 College Students' Attitudes Toward Financial Counseling and Education 99 VIII 4.16 College Students'Debt Level 101 4.17 Regression Results with Socio-Demographic Characteristics as the Independent Variables and College Students' Knowledge of Credit Cards as the Dependent Variable 103 4.18 Regression Results with Socio-Demographic Characteristics as the Independent Variables and College Students' Attitudes toward Use of Credit Cards as the Dependent Variable 105 4.19 Regression Results with Socio-Demographic Characteristics as the Independent Variables and College Students' Attitudes toward Acquisition and Use of Credit Cards as the Dependent Variable 106 4.20 Regression Results with Socio-Demographic Characteristics as the Independent Variables and College Students' Reasons for Using Credit Cards (Convenience/Incentives) as the Dependent Variable ...109 4.21 Regression Results with Socio-Demographic Characteristics as the Independent Variables and College Students' Reasons for Using Credit Cards (Support for Lifestyle/College Education) as

Load more