Precedents of the compulsive use of a credit card: an analysis of university students' buying behavior.
| Autor | dos Santos Felipe, Israel Jose |
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Introduction
The excessive use of credit cards can be harmful to the financial well-being of consumers (Braun Santos, Mendes-Da-Silva, Flores, & Norvilitis, 2016). According to Roberts (1998) and Veludo-de-Oliveira, Ikeda, and Santos (2004), people tend to relate the money used as credit as something abstract (meaning they cannot correctly associate that the purchase price needs to be paid later). Nowadays, the association of credit as something abstract is even more evident, since numerous technological facilities have been created which do not necessarily require a physical credit card; for example, mobile wallets or digital cards which not only allow more convenience and technological innovation for the user (Kumar, Nim, & Sharma, 2019), but can also encourage consumption (Rimple, Srikant, Naseem, & Kumar, 2015).
The compulsion to buy things can be understood as compulsive buying, which occurs when an individual tends to acquire more than they really need and what they can afford with their reserves/savings (Veludo-de-Oliveira et al., 2004). According to O'Guinn and Faber (1989), compulsive buyers have a bigger probability to possess more credit cards, have difficulty paying monthly card bills and are closer to the credit limit. Thus, compulsive buyers can intensely confront indebtedness, which also provokes negative feelings that harm work, social and family relations (Vieira, Flores, Kunkel, Campara, & Paraboni, 2014). Regarding indebtedness, when these people exceed the credit card limit and want to maintain their lifestyle, they end up seeking financial help from family members. This process becomes very stressful for those who lend money, as compulsive behavior tends to be like an addiction, affecting close people (Cordeiro, Wong, & Ponchio, 2019).
The existing literature emphasizes credit cards with a variable that can help explain a particular construct. Thus, important papers have investigated the credit card as a mediator or moderating element of certain factors in compulsive buying. Although these studies have contributed to the theoretical evolution around compulsive buying behavior, there are still some uncertainties regarding credit card use behavior and which factors can influence its use to become compulsive. We want to verify the precedents of compulsive credit card use because we believe that university students' personality dimensions can either encourage or inhibit this behavior.
We tested the influence of a new construction, materialism. As compulsive behavior can be linked to individuals' need to both receive subjective rewards and acquire material goods (Veludo-de-Oliveira, Falciano, & Perito, 2014), it makes sense to think that materialism would encourage people to consume more and more, especially when we understand that we live in a strong consumer culture (Shen, Sam, & Jones, 2014). Our paper presents theoretical and empirical advances. The objective of the work by Veludo-de-Oliveira et al. (2004) is to verify the intensity of credit card use by university students. We go beyond that and study what lies behind the compulsive use of credit cards by college students.
Compared with Felipe, Ceribeli, and Brandao (2017), we investigated the materialism construct as a new factor influencing compulsive behavior focused on credit card use. While Felipe et al. (2017) used the attitudes related to money and compulsive buying by Roberts and Jones (2001). In relation to the studies by Palan, Morrow, Trapp, and Blackburn (2011) and Veludo-de-Oliveira et al. (2014), we note that these studies treat the credit card as a mediator or moderator. In other words, by directing their attention to the use of credit cards only as a mediating or moderating element of compulsion, these studies may be neglecting relevant information for a more accurate understanding of those that stimulate compulsive consumption behavior.
The objective of this work is to identify the factors that precede the compulsive use of the credit card, from observing the consumption behavior of university students. We decided to observe university students because most of the time the first experience with a credit card is usually when a person enters a university (Mendes-Da-Silva, Nakamura, & de Moraes, 2012), seeking to increase their well-being through the process of achieving independence from parents (Lusardi, Mitchell, & Curto, 2010). In addition, this group presents spending behavior under financial practices and employment-related life events (Bruggen, Hogreve, Holmlund, Kabadayi, & Lofgren, 2017).
The relevance of this study permeates the possibility of examining how university students behave in relation to credit cards and identifying which factors may trigger compulsive credit card use (Robb, Moody, & Abdel-Ghany, 2012). This is still little explored in the Brazilian context (Santos, Mendes-Da-Silva, Norvilitis, Protin, & Onusic, 2021). Furthermore, since the precedents of compulsive credit card use are known, this study may be useful to identify the characteristics present in compulsive shoppers, elucidate how personality factors influence the behavior of credit card users and how compulsive credit card use can be detrimental to an individual's financial well-being (Bruggen et al., 2017).
This paper advances the literature because it presents evidence which point out that the use of credit cards should stimulate compulsive consumption by young people, especially women who do not have any income. This suggests that young women may be more prone to indebtedness (Vieira et al., 2014) and are more susceptible to compulsive buying behavior (Faber & O'Guinn, 1992), mainly due to excessive credit card use (Santos et al., 2021). In addition, by investigating how materialism can influence compulsive behavior, we will be able to understand how people who attach importance to acquiring and possessing material goods in their life are motivated to compulsively consume using a credit card. In turn, our work brings some enrichment to the literature produced on the topic discussed herein.
Finally, we understand that the discussions promoted herein can serve as inputs for formulating public policies to optimize the financial education of individuals, so that they can establish a stable financial life and positive financial habits (OECD, 2020). Furthermore, better financial education, especially regarding conscious consumption and safe investment, should allow individuals to better prepare for old age and have a more balanced financial life during youth (Lusardi et al., 2010).
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Literature
Compulsive buying can be understood as uncontrolled buying events (Medeiros, Diniz, Costa, & Pereira, 2015), in which the individual tends to idealize a sense of success and well-being through their purchases (Roberts, 1998). O'Guinn and Faber (1989) define it as a lasting and recurrent act, in which the consumer seeks to mitigate negative feelings. Edwards (1993) complements this idea and adds that compulsive buying can be characterized as an abnormal form of acquisition and expenditure. As pointed out by Harnish and Bridges (2015), compulsive buying in the field of psychology derives from a psychopathological disorder.
Although compulsive buying has similarities with impulsive buying, they have different definitions (Veludo-de-Oliveira et al., 2004). Complementing what was mentioned above, compulsive buying can be understood as a vicious circle (Harnish & Bridges, 2015) that comes from negative emotional states (Matos & Bonfanti, 2016), such as anxiety. On the other hand, impulsive buying is characterized by the absence of planning (Santini, Ladeira, Vieira, Araujo, & Sampaio, 2019), associated with agility in decision-making and an intense need to buy (Lins & Pereira, 2011).
One of the most interesting characteristics of compulsive shoppers is the very recognition that the behavior they develop over time is excessive and inappropriate (Faber & O'Guinn, 1988). This situation tends to generate uncomfortable and embarrassing daily episodes, which provoke feelings of guilt and regret for lack of control (Sari & Suyasa, 2017). In addition to these feelings, compulsive shopping has more serious consequences for the individual and their social nucleus, which may compromise the future of families and individuals (Roberts & Jones, 2001).
It is important to state that one of the negative consequences of compulsive shopping is related to financial problems (Roberts, 1998), which arise from disorganized and irrational credit card management (Kunkel, Vieira, & Potrich, 2015). The compulsive use of credit cards can commonly result in indebtedness and the possibility of buyer default (Veludo-de-Oliveira et al., 2014). Actions ruled by financial irresponsibility and lack of moral conscience (Kunkel et al., 2015) have led individuals and families to buy without proper care to pay their bills. Awanis and Chi Cui (2014) suggest that credit card use encourages individuals to spend more.
2.1 Hypothesis
Yamauchi and Templer (1982) initially developed the money attitude scale, which presents four dimensions related to attitudes toward money: power-prestige, retention time, distrust and anxiety. Three of these dimensions were adapted by Roberts and Jones (2001) and later used in the study by Felipe et al. (2017), who examined how attitudes of power-prestige, distrust and anxiety influence compulsive buying relationships among students. In addition to analyzing how power-prestige, distrust and anxiety influence buying behavior, our work observes how materialism can act as a predictor of compulsion.
The power-prestige construct represents the use of money as a way of impressing other people, with this financial resource being considered synonymous with power for some individuals (Roberts & Jones, 2001). Thus, there is signaling that current society considers the ostentation of material possessions as the most assertive parameter for power over the other...
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