Academic journal article The Journal of Consumer Affairs

Money Attitudes, Credit Card Use, and Compulsive Buying among American College Students

Academic journal article The Journal of Consumer Affairs

Money Attitudes, Credit Card Use, and Compulsive Buying among American College Students

Article excerpt

The consumer culture has evolved into one of the most powerful forces shaping individuals and societies (Roberts and Sepulveda 1999 a, b). The desire to become a member of the consumer culture appears to be universal (Droge and Mackoy 1995). Changing attitudes toward money are an important catalyst behind the spread of the consumer culture. Money is important--especially to American college students who have been raised in a credit card society where debt is used freely (Ritzer 1995). Schor (1998) believes that access to easy credit is one of the causes of overspending. Using a causal modeling approach, the present study investigated the role money attitudes and credit card use play in compulsive buying within a sample of American college students (see Figure 1). Findings suggest that the money attitudes power-prestige, distrust, and anxiety (Yamauchi and Templer 1982) are closely related to compulsive buying and that credit card use often moderates these relationships. Study results have important public pol icy, marketing, and research implications.

The U.S. is at the vanguard of consumption, and the consumer culture is its progeny. The consumer culture is defined as a culture in which the majority of consumers avidly desire, pursue, consume, and display goods and services that are valued for nonutilitarian reasons, such as status (power), envy provocation, and pleasure seeking (Belk 1988). The consumer culture has evolved into one of the most powerful forces shaping individuals and societies (Roberts and Sepulveda 1999a). The desire to become a member of the consumer culture appears to be nearly universal (Droge and Mackoy 1995).

Changing attitudes toward money are an important catalyst behind the spread of the consumer culture. The U.S. has gone from cherishing savings to revering spending (Ritzer 1995; Zuckerman 2000). American consumers remained on a buying binge during the first quarter of 1999. For the first three months of 1999, consumer spending increased at an annualized rate of 6.7 percent. Purchases of durable goods, nondurable goods, and services all registered healthy gains. During the same period, savings reached an all-time low of -0.5 percent. Consumer spending has now exceeded disposable income. This situation is made possible by individuals spending a portion of their stock market gains (Shoesmith 1999).

Money is important--especially to college students who are members of a generation that has been raised in a credit card society. They have grown up with debt and use it freely (Ritzer 1995). Credit cards are a symbol of this age. Schor (1998) believes that easy credit is one of the causes of overspending. Compelling evidence of college students' preoccupation with money comes from the UCLA/American Council on Education Annual Survey of nearly a quarter of a million entering college students. Three of every four students asserted that a "very important" reason for going to college was to make more money. One of two students expressed the same sentiment in 1971. Becoming "very well off financially" was "very important or essential" to 74 percent of college students in 1996. This is up from 39 percent who responded similarly in 1971. Of nineteen listed objectives, becoming "very well-off financially" now ranks number one. It outranks developing a life philosophy, becoming an authority in one's field, helping ot hers, and raising a family. Clearly, to young Americans in the 1990s, money matters (Clapp 1998).

Why should one expect today's young adults to exhibit high levels of compulsive buying? There is a widespread view that attitudes about debt have changed dramatically during the twentieth century--from a general abhorrence of debt to acceptance of credit as part of a modem consumer society (Lea et al. 1995; Zuckerman 2000). Lea et al. (1993) point out the growth of a "culture of indebtedness." They found that an important factor in predicting debt status was whether respondents know other people around them who are/were in debt, and how they thought these people would react if they knew the respondent was in debt. …

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