On Shifting Consumers from High-Interest to Low-Interest Debt

Posted: 12 Nov 2019

See all articles by Adam Eric Greenberg

Adam Eric Greenberg

Bocconi University - Department of Marketing

Hal Hershfield

University of California, Los Angeles (UCLA) - Marketing Area

Date Written: April 29, 2019

Abstract

In the United States, many consumers are increasingly accumulating debt, much of which is harmful and expensive. Prior research has devoted a great deal of attention to understanding why consumers generally get into debt and the strategies they can use to repay existing debts. While this work has furthered the agenda of helping consumers reduce or eliminate their overall debt balances, it has failed to emphasize the fact that for many consumers, debt may be unavoidable. This article aims to promote research that addresses not only overall debt reduction but also the need for consumers to shift from more to less costly types of debt. By shedding light on the psychological reasons why consumers may naturally gravitate toward more costly forms of debt when less costly ones may be available, we offer a novel perspective on why consumers get into and stay in debt longer than they should. This new angle has the potential to spur on further research into the ways consumers can use debt more effectively and less expensively in service of the overarching goal of debt reduction.

Full Text Available Here: https://doi.org/10.1002/cfp2.1035

Suggested Citation

Greenberg, Adam Eric and Hershfield, Hal, On Shifting Consumers from High-Interest to Low-Interest Debt (April 29, 2019). Financial Planning Review, Vol. 2, Issue 1, March 2019, Available at SSRN: https://ssrn.com/abstract=3485673

Adam Eric Greenberg (Contact Author)

Bocconi University - Department of Marketing ( email )

Via Roentgen, 1 (4th floor)
Milan, MI 20136
Italy

Hal Hershfield

University of California, Los Angeles (UCLA) - Marketing Area ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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