Credit card attitudes and behaviors of college students

Students were then asked to provide information about how often they used credit cards, and about how much they charged on their credit cards during the previous month. As shown in Table 5, almost one quarter of those students who held credit cards used their cards regularly (often and sometimes) for each category. The most frequent purchases with credit cards included apparel and services, food away from home, and entertainment. The least purchased categories included housing and tobacco products. College students charged the largest amount of money for apparel and services. The average balance for those who held credit cards was $890.42. The average balance for those who carried a balance from month to month was $1,769.85.

Table 6 shows the results from the regression analysis of factors associated with credit attitudes. Among the demo-graphic characteristics, racial/ethnic background was significantly related to respondents' attitudes toward credit. Compared to other ethnic groups, White/ Caucasians had more positive attitudes toward credit, controlling for other variables. Age, gender, and birth order were not significantly related to the attitude toward credit cards (See table 6).

Among the socioeconomic variables, academic level was significantly related to respondents' attitude toward credit. Specifically, those who were in higher academic years tended to have a negative attitude toward credit compared to those who were in lower academic years, controlling for other factors. Other socioeconomic characteristics such as income, employment status, housing situation, and academic major were not significantly related to the attitude toward credit cards.

Background characteristics were significantly related to attitudes toward credit cards. Those students whose parents used credit cards often had a positive attitude toward credit compared to those who had parents used credit cards less, controlling for other variables. To a lesser degree, students whose parents had credit-related problems tended to have a negative attitude toward credit compared to others, controlling for other variables. Credit card possession was positively associated with the attitude toward credit. Those who possessed credit card(s) had a more positive attitude toward credit compared to those who did not have a credit card.

The two psychological factors were significantly related with the attitude toward credit. Money ethic and locus of control were positively associated with credit. Those who had a positive money attitude (i.e., ethic) and those who exhibited a strong (i.e., higher level) external locus of control tended to have a positive attitude toward credit compared to others, controlling for other factors.

Discussion and Implications

It appears that Henry et al. (2001) were correct in warning that "university students are vulnerable to financial crisis" (p. 246). Compared to reports by Churaman (1988), today's college students are not exhibiting improved credit knowledge or improved credit card practices. About one-half of the students paid their credit balances in full each month, but one would have expected an improvement in this and other behaviors in the decade since Churaman reported her findings.