Sandra Awanis

Consumer susceptibility to credit card misuse and indebtedness

Purpose – Prior research suggests that payment mechanisms are imbued with cues that affect purchase evaluation and future spending behavior. Credit cards are distinguished from other payment mechanisms as they elicit greater willingness to spend, prompt weaker recollections of past credit expenses and overvaluation of available funds – a phenomena the authors call as “credit card effect.” Little is known about the individuals’ differential exposure to the credit card effect. The purpose of this paper is to present a new concept and measure of susceptibility to the credit card misuse and indebtedness (SCCMI). Design/methodology/approach – The study focussed on young credit card users (aged 18-25) from Malaysia, Singapore, and the UK as they represent varying levels of credit card issuance and consumer protection regulations. The authors conducted confirmatory factor analysis and invariance tests to assess the validity, reliability and parsimony of the proposed scale in the three countries. Further, the aut...

Automation in Credit Card Repayment: A Friend or a Foe? An Abstract

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Ethical Appraisal of Credit-Card Marketing Strategy: Measure and Antecedent Exploration of Consumer Vulnerability to Credit-Card Debt

880 billion of revolving debt in the USA, it is no surprise that policy developers seek to remedy the global credit card debt problem. Credit card issuers across countries now offer automated payment facilities online to ensure that consumers commit to regular repayments. However, insofar it is unclear whether repayment automation leads to better financial decisions.

A Structural Equation Model of Credit Card Debt Among the Youth Market

Faced with market saturation and intense competition, the global credit-card industry has now focused their attention to the youth market as the final untapped market segment to sustain its profitability. However, such targeting approach has been subjected to ethical scrutiny, as the normal requirements for securing a credit-card are often waived in order to procure access into the youth market. Moreover, their vulnerability means that young people are more prone towards debt-accumulation and commence a possibly worrisome future. Although policy-makers have addressed the issue by introducing credit-counselling and educational programmes, there are minimal responses from the credit-card institutions to acknowledge the detrimental effect of credit-cards on vulnerable consumers. In light of the current literary trend in creating sustainable marketing environment, this study introduces the notion of “consumer vulnerability towards credit-card debt”, indicated by “consumer’s ideology of credit-card practise”, “awareness of credit-card consequences” and “susceptibility to credit-card promotions”. By identifying the vulnerability levels of credit-card marketers’ market segments, this study hopes to help them address any power imbalance that exists between producers and consumers by providing ethical service offerings. The study also hopes to enhance consumer vulnerability and youth market literature, and help youth to conduct self-assessment regarding their credit-card use.

The Myth of Self-Centeredness in Materialism: Reconciling Collectivism and Materialism in Asia

Faced with market saturation and intense competition, the credit-card industry has turned to the youth market as the final untapped market segment to sustain profitability. However, the vulnerable status of this market segment means that they might be exposed to debt accumulation and a worrisome future. Correspondingly, marketers are expected to prioritize social responsibilities without posing harm to other stakeholders. In an effort to enrich the knowledge about youth market vulnerability to credit card, this paper reports the development of several important new constructs and a structural equation model with empirical results. Following the theory of planned behavior (Ajzen, 1991), three sequential processes of consumer attitudes and patterns of credit card usage are conceptualized. Our theory argues that attitudes towards deferred gratification and instant gratification function as antecedents to consumer susceptibility to credit card effects, which subsequently affect the degrees of problematic credit debt accumulation. A sequential study of qualitative and quantitative methods was employed and the current paper reports the main results on the validity of measurement and the structural model.

Susceptibility to Credit Card Effects and Revolving Credit Card Holders:A Multi-Country Evaluation on British, Singaporean and Malaysian Youth Markets

Materialism, which is the importance placed on the acquisition and possessions of material objects, is often depicted as a self-prioritizing trait rooted in an individualistic value (Belk 1985; Richins and Dawson 1992). Materialistic consumers are seen as self-centered individuals who prefer to build meaningful relationships with possessions rather than people (Burroughs and Rindfleisch 2002; Kasser and Ryan 1993). However, this theory is incongruent with the reality, as cultural studies routinely find that materialistic consumption manifests strongly among collectivistic Asian consumers (Cleveland and Chang 2009; Ger and Belk 1996). Such contradiction points to an inconsistency between the theories developed primarily in the United States and the realities surrounding non-Western consumers’ attitudes and behavior (Sharma 2010). The present research thus aims to reconcile theory and practice by reassessing the pertinence of self-centeredness as the central domain of materialism among Asian consumers.

Automated Payment, Financial Decision-Making and a Public Policy Conundrum

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.

Asia's Materialists: Reconciling Collectivism and Materialism

Credit card issuers across countries now offer automated payment facilities online to ensure that consumers commit to regular repayments. However, insofar it is unclear whether repayment automation leads to better financial decisions. With an average of

Automation in Credit Card Repayment

880 billion of revolving debt in the U.S., it is no surprise that policy developers seek to remedy the global credit card debt problem. The current research makes three contributions. First, our study raises public awareness about the negative effects of automated payments on credit card repayments. Contrary to the established assumptions that autopay helps consumers to manage consumer finances (e.g., www.directdebit.co.uk), our experiment unanimously show that autopay facilities reduce the amount of credit card repayment. Second, our study offers a contemporary and relevant insight into the consumers’ online credit card management, which is distinct from its offline counterpart. Specifically, in an online environment, consumers can process information on their credit card and saving almost simultaneously. For example, some consumers may access credit and saving accounts in different browser tabs, while others who own credit and saving accounts from the same institutions may be able to access both accounts within the same webpage. Finally, our study enriches understanding of individual differences in repayment decisions behaviour. Our results indicate that certain attitudinal tendencies to credit cards heightens the effect of autopay on repayment, but this effect is intensified when the context involves those with low level of saving.