Credit cards, which have already received huge popularity all over the world, while being exceptionally convenient and helpful, also known for having a set of negative effects on the financial future of the cardholders who become substantially dependent on spending on credit. It is, in particular, fascinating to make an investigation of negative impacts of the use of credit cards on students. In terms of this paper the analysis of three credible researches devoted to examining mentioned issue will be represented. At first, the findings of Limerick and Peltier regarding impact of “self-control failures” on debt of students’ credit cards will be discussed (2014). Then, the research of Robb and Pinto, explaining negative trends of “financially at-risk” students’ behavior in relation to credit card use, will be presented (2010). Eventually, the work of Fagerstrom and Hantula, devoted to exploring negative impacts of credit cards’ availability on the financial state of the cardholder will be analyzed (2013).
The ideas expressed by Limerick and Peltier, to great extent, have been supported by the work of Robb and Pinto suggesting that there are two categories of students: “financially at-risk (FAR)” and “not financially at-risk (NFAR)” (2010). As the research performed by the authors has showed, so-called FAR students tend to use their credit card in a considerably less responsible way than the NFAR students: they use their cards more frequently spending money both on necessary and non-necessary goods, and they are practicing going over the credit limit. Obviously, such a risky behavior leads to increased costs of borrowing, growing of rates, undesirable fees, and higher possibility of financial difficulties in the future of students. (Limerick and Peltier, 2010)
Furthermore, mentioned thoughts about increased likelihood of students failing in managing their credit card behavior to suffer from serious financial problems can be reinforced by the findings obtained by Fagerstrom and Hantula (2013). Due to simulating a specific shopping experiment, the researchers discovered that huge part of students prefer to pay high interest price in order to purchase desired mobile phone at a specific moment of time rather than to save money, even if only for a week, and buy the phone avoiding paying additional interest-fee (Fagerstrom and Hantula, 2013). Such type of the behavior might contribute to overspending, long-term costs on credit card, debt overload, and prevent from achieving worthy financial aims.
References
Fagerstrom, A., & Hantula, D. A. (2013, March). Buy It Now and Pay for It Later: An Experimental Stud y of Student Credit Card Use. The Psychological Record, 63 (2), 323-331.
Limerick, L., & Peltier, J. W. (2014). The Effects of Self-Control Failures on Risky Credit Card Usage. Marketing Management Journal, 24 (2), 149-161.
Robb, C. A., & Pinto, M. B. (2010, December). College Students and Credit Card Use: An Analysis of Financially At-Risk Students. College Student Journal, 44 (4), 823-835.
