Credit card knowledge, attitudes, and practices of college students

Widespread use of credit cards by college students has raised questions about students' ability to manage their finances effectively. Parents, counselors, college administrators, and others have expressed concern that young people lack the necessary skills to handle the cards which credit card companies are making increasingly accessible to college students.

The purpose of the proposed study was to obtain and analyze data on the credit card behavior of undergraduate students enrolled at a major state-supported university in the southwestern United States, with an enrollment of approximately 27,000. Based on a revised theoretical framework of the Deacon and Firebaugh model of family resource management, this study sought to depict interrelationships between students' socio-demographic background (input), college students' credit card knowledge and college students' credit card attitudes (throughput); and college students' credit card practices (output).

Data were collected for the study in fall 2003 from a convenience sample of 2,113 undergraduate students representing the nine colleges on campus. The survey instrument used for data collection was developed by the researcher after a literature search yielded no suitable existing instrument. A review of questionnaires used in previous studies on college students and credit cards, as well as communication with researchers, generated concepts and questions for the development of an instrument. The questionnaire consisted of 39 questions requiring a variety of responses, including true/false, ranking, fill in the blank, and rating on a Likert-type scale.

Descriptive statistics were applied to determine how participants acquired credit cards, their reasons for using credit cards, and the types of purchases made with credit cards. In addition, descriptive statistics identified where students had obtained their knowledge of personal finance/money management principles; college students' attitudes toward financial education and counseling; and college students' credit card, student loan, and other consumer debt. Stepwise multiple regression analyses were conducted to examine the relationships between the following: college students' socio-demographic characteristics and college students' credit card knowledge and attitudes (input to throughput variables); college students' socio-demographic characteristics and college students' credit card practices (input to output variables) and between college students' credit card knowledge and attitudes and college students' credit card practices (throughput to output variables). A path analysis was used to test the conceptual model.