Financial Self-Efficacy and the Financial Satisfaction of Credit-Card Users

29 Pages Posted: 25 Sep 2017

See all articles by Patrick Payne

Patrick Payne

Western Carolina University - College of Business

Sarah Asebedo

Texas Tech University

Date Written: September 22, 2017

Abstract

This study tests whether an individual’s sense of financial self-efficacy mitigates the effects of credit-card mismanagement on users’ financial satisfaction. We first replicate the results of a previous study of credit-card usage and risk tolerance and find that credit-card mismanagement is associated with lower financial satisfaction for only borrowers with low risk tolerance. We then use data from the Health and Retirement Study and find that credit-card mismanagement reduces the financial satisfaction of borrowers with lower financial self-efficacy only. These results also demonstrate the usefulness of FSE as a predictor of borrower behavior, and reinforce the theoretic connection between FSE and individual risk preferences.

Keywords: credit, credit cards, financial satisfaction, Health and Retirement Study, financial self-efficacy

Suggested Citation

Payne, Patrick and Asebedo, Sarah, Financial Self-Efficacy and the Financial Satisfaction of Credit-Card Users (September 22, 2017). 2018 Academic Research Colloquium for Financial Planning and Related Disciplines, Available at SSRN: https://ssrn.com/abstract=3042570 or http://dx.doi.org/10.2139/ssrn.3042570

Patrick Payne (Contact Author)

Western Carolina University - College of Business ( email )

United States

Sarah Asebedo

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

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