scholarly journals Neural mechanisms of credit card spending

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Sachin Banker ◽  
Derek Dunfield ◽  
Alex Huang ◽  
Drazen Prelec
Keyword(s):  
Credit Card ◽  
Credit Cards ◽  
Purchase Behavior ◽  
Facilitation Effect ◽  
Product Price ◽  
Personal Credit ◽  
Psychological Mechanisms ◽  
Network Activation ◽  
Payment Instruments ◽  
Reward Network

AbstractCredit cards have often been blamed for consumer overspending and for the growth in household debt. Indeed, laboratory studies of purchase behavior have shown that credit cards can facilitate spending in ways that are difficult to justify on purely financial grounds. However, the psychological mechanisms behind this spending facilitation effect remain conjectural. A leading hypothesis is that credit cards reduce the pain of payment and so ‘release the brakes’ that hold expenditures in check. Alternatively, credit cards could provide a ‘step on the gas,’ increasing motivation to spend. Here we present the first evidence of differences in brain activation in the presence of real credit and cash purchase opportunities. In an fMRI shopping task, participants purchased items tailored to their interests, either by using a personal credit card or their own cash. Credit card purchases were associated with strong activation in the striatum, which coincided with onset of the credit card cue and was not related to product price. In contrast, reward network activation weakly predicted cash purchases, and only among relatively cheaper items. The presence of reward network activation differences highlights the potential neural impact of novel payment instruments in stimulating spending—these fundamental reward mechanisms could be exploited by new payment methods as we transition to a purely cashless society.

Theory of Credit Card Networks: A Survey of the Literature

2003 ◽  
Vol 2 (2) ◽  
Author(s):  
Sujit Chakravorti
Keyword(s):  
Credit Card ◽  
Credit Cards ◽  
Economic Models ◽  
Theoretical Models ◽  
Future Research ◽  
Business Practices ◽  
Costs And Benefits ◽  
Research Topics ◽  
Payment Instruments ◽  
The World

Credit cards provide benefits to consumers and merchants not provided by other payment instruments as evidenced by their explosive growth in the number and value of transactions over the last 20 years. Recently, credit card networks have come under scrutiny from regulators and antitrust authorities around the world. The costs and benefits of credit cards to network participants are discussed. Focusing on interrelated bilateral transactions, several theoretical models have been constructed to study the implications of several business practices of credit card networks. The results and implications of these economic models along with future research topics are discussed.

scholarly journals Submission on improving acquisition of risk prevention and limit the bad debts of credit cards

2019 ◽  
Vol 2 (3) ◽  
pp. 19-29
Author(s):  
Dang Kien Cuong
Keyword(s):  
Credit Card ◽  
Credit Cards ◽  
Credit Market ◽  
Developed Countries ◽  
Legal Framework ◽  
Risk Prevention ◽  
Legal Regulations ◽  
Personal Credit ◽  
The U.S

To develop a sound personal credit market, especially credit cards, prevent and reduce the increasing bad debts in this market, it is necessary to establish, enhance and supplement the legal framework on issuance, granting credit card limits. Through the research about legal regulations on issuing conditions, granting personal credit limit via credit cards in developed countries in Europe, the U.S., and Canada, this paper aims to present findings on the above issues to contribute to the establishment, enhancement of and supplement to the Vietnam’s legal framework on the issuance and settlement of credit card bad debts.

The Transactions Demand for Credit Cards

2007 ◽  
Vol 7 (1) ◽  
Author(s):  
Kathleen W. Johnson
Keyword(s):  
Credit Card ◽  
Consumer Credit ◽  
Credit Cards ◽  
Credit Card Debt ◽  
Financial Vulnerability ◽  
Short Term ◽  
Payment Instruments ◽  
The Cost ◽  
The Relationship

Abstract I argue that the measure of credit card debt used by researchers has grown rapidly in part because it captures debt arising from transactions in which a credit card is used because of its advantages over other payment instruments. Increases in debt stemming from such use may not signal greater household financial vulnerability if households are willing and able to repay this short-term debt. However, it may suggest that the cost of using credit cards to pay for purchases has declined relative to other payment instruments. I conclude that had transactions demand remained at its real 1992 levels, rather than growing almost 15 percent per year, measured credit card debt would have grown a bit less than 1 percentage point slower per year between 1992 and 2001. Moreover, I show that removing transactions demand from aggregate consumer credit can alter conclusions about the relationship between credit and consumption.

scholarly journals PENAL POLICY DALAM UPAYA PREVENTIF KEJAHATAN CARDING DI INDONESIA

2020 ◽  
Vol 3 (1) ◽  
pp. 86-98
Author(s):  
Nugroho Wisnu Pujoyono
Keyword(s):  
State Government ◽  
Credit Card ◽  
Credit Cards ◽  
The Internet ◽  
Legal Research ◽  
Legal Process ◽  
Penal Policy ◽  
Payment Instruments ◽  
The Law ◽  
Virtual Shopping

ABSTRAKKejahatan Carding adalah suatu aktivitas untuk mendapatkan nomer-nomer kartu kredit orang lain yang digunakan untuk berbelanja di internet secara tidak sah atau illegal. Carding, sebuah ungkapan mengenai aktivitas berbelanja secara maya (lewat komputer), dengan menggunakan, berbagai macam alat pembayaran yang tidak sah. Untuk mengurangi atau menghilangkan kemungkinan terjadinya suatu kejadian buruk yang tidak diinginkan di masa depan, sesuatu hal antisipasi yang dilakukan sebelum terjadinya sesuatu hal yang buruk yang tidak di inginkanmaka ada upaya Penal Policy yaitu dengan cara bertindak atau kebijakan dari negara (pemerintah) untuk menggunakan hukum pidana dalam mencapai tujuan tertentu, terutama dalam menanggulangi kejahatan, memang perlu diakui bahwa banyak cara maupun usaha yang dapat dilakukan oleh setiap negara (pemerintah) dalam menanggulangi kejahatan. Rumusan Masalah Bagaimanakah Penal Policy Dalam Upaya Preventif Kejahatan Carding, Proses Hukum Pidana Dalam Menyelesaikan Kejahatan Carding. Jenis penelitian ini adalah Penelitian hukum normatif menggunakan analisis kualitatif.Hasil penelitian yaitu Penal Policy Dalam Upaya Preventif Kejahatan Carding di Indonesiaadalahperlu adanya penguatan pada Undang-undang Nomor 11 Tahun 2008. Penguatan hukum tersebut dimaksudkan untuk mengefektifkan fungsi pencegahan (preventif), sehingga kejahatan tersebut tidak lagi timbul agar kartu kredit tidak dibobol.Proses Hukum Pidana Dalam Menyelesaikan Kejahatan Carding yaitu Pada UU ITE dimuat tentang perbuatan yang dilarang pada Pasal 27 sampai Pasal 36. Pada pasal 42 UU ITE diatur pula mengenai ketentuan penyidikan berdasar Pasal 183 KUHAP.Kata kunci: penal policy; preventif; kejahatan; cardingABSTRACTCarding crime is an activity to get other people's credit card numbers that are used to shop on the internet illegally or illegally.Carding, an expression of virtual shopping activities (via computer), by using various kinds of illegal payment instruments. To reduce or eliminate the possibility of an unwanted bad event in the future, something anticipated that is done before something bad happens that is not desired then there is a Penal Policy effort that is by way of action or policy from the state (government) to use the law Crime in achieving certain goals, especially in tackling crime, it needs to be recognized that there are many ways and efforts that can be done by each country (government) in tackling crime. Formulation of the Problem How is Penal Policy in the Preventive Efforts of Carding Crimes, Criminal Legal Process in Resolving Carding Crimes. This type of research is normative legal research using qualitative analysis. The results of the study are Penal Policy in Preventive Efforts for Carding Crimes in Indonesia, it is necessary to strengthen Law Number. 11/2008. Strengthening the law is intended to streamline the preventive function, so that these crimes no longer arise so credit cards are not broken into. Criminal Legal Process in Resolving Carding Crimes, namely the ITE Law contains the prohibited acts in Article 27 to Article 36. In article 42 the ITE Law also regulates the provisions of the investigation based on Article 183 of the Criminal Procedure Code.Keywords: policy; preventive; crime; carding

Consumers‟ Acceptance of „Halal‟ Credit Card Services: An Empirical Analysis

2015 ◽  
Vol 3 (1) ◽  
pp. 51 ◽  
Author(s):  
Zaimy Johana Johan ◽  
Lennora Putit
Keyword(s):  
Perceived Control ◽  
Credit Card ◽  
Credit Cards ◽  
Product Knowledge ◽  
Key Factors ◽  
Developing Nation ◽  
Business Transactions ◽  
Factors Influencing ◽  
Financial Credit ◽  
Survey Questionnaires

Many past researches have been carried out in an attempt to continuously understand individuals‟ consumption behaviour. This study was conducted to investigate key factors influencing consumers‟ potential acceptance of halal (or permissible) financial credit card services. Specifically, it anticipated the influence of attitude, social influences and perceived control on consumers‟ behavioural intention to accept such services. In addition, factors such as religiosity and product knowledge were also postulated to affect consumers‟ attitude towards the act of using halal credit cards for any retail or business transactions. Using non-probability sampling approach, a total of 500 survey questionnaires was distributed to targeted respondents in a developing nation but only 220 usable feedbacks were received for subsequent data analysis. Regression results revealed that religiosity and product knowledge significantly influence consumers‟ attitude toward using halal credit card services.  Attitude in turn, subsequently has a significant impact on consumers‟ intention to accept halal financial credit card services. Several theoretical and managerial contributions were observed in this study.   

scholarly journals Does the visual salience of credit card features affect choice?

2021 ◽  
pp. 1-18
Author(s):  
Matthew D. Hilchey ◽  
Matthew Osborne ◽  
Dilip Soman
Keyword(s):  
Interest Rates ◽  
Random Sample ◽  
Credit Card ◽  
Credit Cards ◽  
Salient Feature ◽  
The Other ◽  
Visual Salience ◽  
Product Features ◽  
Hypothetical Scenario

Abstract Regulators require lenders to display a subset of credit card features in summary tables before customers finalize a credit card choice. Some jurisdictions require some features to be displayed more prominently than others to help ensure that consumers are made aware of them. This approach could lead to untoward effects on choice, such that relevant but nonprominent product features do not factor in as significantly. To test this possibility, we instructed a random sample of 1615 adults to choose between two hypothetical credit cards whose features were shown side by side in tables. The sample was instructed to select the card that would result in the lowest financial charges, given a hypothetical scenario. Critically, we randomly varied whether the annual interest rates and fees were made visually salient by making one, both, or neither brighter than other features. The findings show that even among credit-savvy individuals, choice tends strongly toward the product that outperforms the other on a salient feature. As a result, we encourage regulators to consider not only whether a key feature should be made more salient, but also the guidelines regarding when a key feature should be displayed prominently during credit card acquisition.

Money growth variability and output: evidence with credit card-augmented Divisia monetary aggregates

2020 ◽  
Vol 24 (5) ◽  
Author(s):  
Jinan Liu ◽  
Apostolos Serletis
Keyword(s):  
Financial Stability ◽  
Credit Card ◽  
Negative Impact ◽  
Balance Sheet ◽  
Credit Cards ◽  
Money Growth ◽  
Monetary Policies ◽  
Growth Variability ◽  
Significant Negative Impact ◽  
Growth Volatility

Abstract We reexamine the effects of the variability of money growth on output, raised by Mascaro and Meltzer (1983), in the era of the increasing use of alternative payments, such as credit cards. Using a bivariate VARMA, GARCH-in-Mean, asymmetric BEKK model, we find that the volatility of the credit card-augmented Divisia M4 monetary aggregate has a statistically significant negative impact on output from 2006:7 to 2019:3. However, there is no effect of the traditional Divisia M4 growth volatility on real economic activity. We conclude that the balance sheet targeting monetary policies after the financial crisis in 2007–2009 should pay more attention on the broad credit card-augmented Divisia M4 aggregate to address economic and financial stability.

scholarly journals Credit card cue effect

2019 ◽  
Vol 38 (2) ◽  
pp. 368-383
Author(s):  
King Yin Wong ◽  
Michael Lynn
Keyword(s):  
Credit Card ◽  
Design Methodology ◽  
Credit Cards ◽  
Well Being ◽  
Financial Security ◽  
Consumer Spending ◽  
Content Type ◽  
Moderation Effect ◽  
Show Evidence

Purpose The extant literature has mixed results regarding the credit card cue effect. Some showed that credit card cues stimulate spending, whereas others were unable to replicate the findings or found that cues discourage consumer spending. The purpose of this paper is to investigate how consumers’ sensitivity to the pain of payment affects their mental associations about credit cards and how the differences in credit card associations moderate the credit card cue effect on spending, providing a possible explanation for the mixed results in the literature. Furthermore, this paper examines the role of consumers’ perceived financial well-being, measured by their perceptions of current and future wealth and their sense of financial security, in mediating this moderation effect. Design/methodology/approach An experimental study was conducted with a sample of 337 participants to test the hypothesized model. Findings After being shown credit card cues, spendthrift participants had more spending-related thoughts and less debt-related thoughts, perceived themselves as having better financial well-being and consequently spent more than tightwad participants. Originality/value To the authors’ knowledge, this is the first study to investigate the direct link between an exposure to credit card cues and perceived financial well-being, and one of the few to show evidence of the moderating effect of consumers’ sensitivity to the pain of payment on spending when credit card cues are present. This study suggests that marketers may use credit card cues to promote consumer spending, whereas consumers, especially spendthrifts, should be aware of how credit card cues may inflate their perceived financial well-being and stimulate them to spend more.

Does knowing overcome wanting? The impact of consumer knowledge and materialism upon credit card selection with young consumers

2015 ◽  
Vol 16 (1) ◽  
pp. 50-70 ◽  
Author(s):  
Jakob Cakarnis ◽  
Steve Peter D'Alessandro
Keyword(s):  
Comparative Study ◽  
Survey Research ◽  
Credit Card ◽  
Design Methodology ◽  
Credit Cards ◽  
Consumer Knowledge ◽  
Content Type ◽  
Young Professionals ◽  
The Impact ◽  
Selection Of

Purpose – This paper investigates the determinants of credit card use and misuse by student and young professionals. Critical to the research is the impact of materialism and knowledge on selection of the appropriate credit card. Design/methodology/approach – This study uses survey research and partial least squares to investigate credit card behaviors of students versus young professionals. Findings – In a comparative study of young professionals and students, it was found that consumer knowledge, as expected, leads to better consumer selection of credit cards. Materialism was also found to increase the motivation for more optimal consumer outcomes. For more experienced consumers, such as young professionals, it was found that despite them being more knowledgeable, they were more likely to select a credit card based on impulse. Originality/value – This paper examines how materialism may in fact encourage some consumers to make better decisions because they are more motivated to develop better knowledge. It also shows how better credit card selection may inhibit impulse purchasing.

Materialism and Credit Card Use by College Students

2000 ◽  
Vol 86 (2) ◽  
pp. 643-652 ◽  
Author(s):  
Mary Beth Pinto ◽  
Diane H. Parente ◽  
Todd S. Palmer
Keyword(s):  
College Students ◽  
Credit Card ◽  
Credit Cards ◽  
The United States ◽  
College Campuses ◽  
Spending Patterns ◽  
Significant Difference ◽  
Students Attitudes ◽  
The Relationship ◽  
Credit Card Use

Much has been written in the popular press on credit card use and spending patterns of American college students. The proliferation of credit cards and their ease of acquisition ensure that students today have more opportunities for making more credit purchases than any other generation of college students. Little is known about the relationship between students' attitudes towards materialism and their use of credit cards. A study was conducted at three college campuses in the northeastern part of the United States where a total of 1,022 students were surveyed. Students' attitudes toward use of credit and their credit card balances were evaluated relative to their scores on Richins and Dawson's Materialism Scale (1992). Our findings suggest no significant difference between those individuals scoring high versus low on the Materialism Scale in terms of the number of credit cards owned and the average balance owed. Individuals high on materialism, however, significantly differed in terms of their uses for credit cards and their general attitude toward their use.

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