In today’s vogue towards a cashless society, preference for “plastic money” has dominated conventional payment forms such as cash and checks (Feinberg 1986; Soman 2003; White 1975). Credit card is arguably the most beneficial type of plastic money as it allows an intertemporal allocation of income, which entitles consumers to borrow future income to use in the present (Prelec and Loewenstein 1998). However, credit card also bears some unintended negative consequences, particularly for the young consumers. This study introduces a concept termed susceptibility to credit card effects to determine the extent to which individuals perceive credit cards as spending stimuli that promotes greater ease of spending. The objective of this study is twofold. First, we develop and validate the SCCE scale in a cross-country setting to statistically show the widespread credit card effects across environments with different credit card regulations. Secondly, we test the hypothesis that susceptibility to credit card effects has a positive effect on the tendency to become revolving credit card holders, which signify problematic credit card debt accumulation.
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- Susceptibility to Credit Card Effects and Revolving Credit Card Holders: A Multi-Country Evaluation on British, Singaporean and Malaysian Youth Markets
Charles C. Cui