Risk Tolerance and the Financial Satisfaction of Credit Card Users

This study tests whether risk tolerance mitigates the effects of credit card mismanagement on users' financial satisfaction. We used data from the Health and Retirement Study and found results showing that credit card mismanagement reduces the financial satisfaction of lower-risk-tolerance user...

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Bibliographic Details
Published in:Financial counseling and planning 2019-01, Vol.30 (1), p.110-120
Main Authors: Payne, Patrick, Kalenkoski, Charlene M., Browning, Christopher
Format: Article
Language:English
Subjects:
Age
Balance sheets
Behavioral Sciences
Borrowing
Cognitive Ability
Consumer credit
Consumers
Consumption
Correlation
Costs
Counseling
Credit (Finance)
Credit card industry
Credit cards
Debt (Financial)
Federal Reserve monetary policy
Financial literacy
General Counseling
Households
Interest rates
Life Style
Liquid assets
Literature Reviews
Marriage and Family Counselling
Money Management
Participant Characteristics
Preferences
Questionnaires
Retirement
Risk
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Summary:This study tests whether risk tolerance mitigates the effects of credit card mismanagement on users' financial satisfaction. We used data from the Health and Retirement Study and found results showing that credit card mismanagement reduces the financial satisfaction of lower-risk-tolerance users only. The results also suggest that the psychic costs of credit card mismanagement (i.e., stress and anxiety), not the monetary costs (fees and higher interest rates), may be the biggest contributors to the dissatisfaction associated with credit card use.
ISSN:1052-3073
1947-7910
DOI:10.1891/1052-3073.30.1.110