- The use of credit cards by young families, their money management
practices, and the relationship between money management
practices and their control of credit card use was researched in this
A sample of 60 Oregon families was drawn from the 1975 Johnson's
Albany Area City Directory. These families were composed of
a married couple living together with at least 1 child between the
ages of 6 and 10 years, who used credit cards monthly. The husbands
had a mean age of 33 years, and had completed a mean of 14
years of schooling. The wives were younger with a mean age of 30
and had completed a mean of 13 years of schooling. The couples
were married a mean of 10 years, and 60 percent had 2 children. The
husbands were principally employed in operative and laborer occupations,
and the wives were largely homemakers. Sixty-three percent
of the families earned a total yearly income between $10, 000 and
$22, 000. The mean yearly income was $17, 857.
The number of credit cards used by the families in a month
ranged from 1 to 21 with a mean of 4 cards. Credit cards were
used 1 to 61 times in an average month, with a mean frequency of
9 times per month. The mean number of types of purchases made
with credit cards in a month was 6. Sixty-seven percent of the families
used an oil company credit card regularly, followed closely by
65 percent who used a retail store card. Clothing was the commodity
purchased with credit cards by the largest number of families, gasoline
was the second most frequently purchased item. Most families
charged under $100 per month with credit cards. Eighty-seven percent
of the families reported that both the husband and wife decided
upon the purchases to make with credit cards, although 60 percent
reported that the wives made the most purchases using credit cards.
Most of the wives used a credit card bearing their names, including
those whose accounts were in the husbands' names.
Spending plans were used by 78 percent of the families; the
most common being unwritten plans for a month. Eighty-two percent
of the families kept their sales slips from credit card purchases as
a means of keeping records of their purchases.
A regression analysis was used to test the hypotheses
that control of credit card use was linearly related to the money
management practices of the families. The money management
practices included 1) the number of credit cards used by the families,
2) the number of types of purchases for which the families used a
credit card, 3) record keeping practices used by the families, 4)
budgeting practices employed by the families, and 5) the frequency
with which the families made purchases using a credit card.
Hypothesis 1, Hypothesis 1, the number of credit card bills
paid in full is linearly related to the money management practices
employed by a family, was not supported by the data at the .10 level
of significance. Fifty percent of the families paid their credit card
bills in full 11 or 12 months of the year. The mean number of months
in which all credit card bills were paid in full was 7.
Hypothesis 2. Hypothesis 2, the number of monthly credit
card billings that are missed is linearly related to the money management
practices employed by a family, was not supported at the .10
significance level. Eighty percent of the families reported that they
never missed payment on a credit card debt.
Hypothesis 3. Hypothesis 3, the degree to which the family
buys more with credit cards than if cash were required is linearly
related to the money management practices employed by a family was
not supported at the .10 level of significance. Sixty-eight percent of
the families reported that credit cards caused them to buy no more
or just slightly more than if cash were required.
Hypothesis 4. Hypothesis 4, the degree to which the family
buys more with credit cards than if another loan were required is
linearly related to the money management practices employed by a
family, was not supported by the data at the .10 level of significance.
Fifty percent of the 60 families reported that credit cards caused
them to buy no more than if another type of credit were required to
make a purchase.
Hypothesis 5. Hypothesis 5, the degree to which the family
indicates that it feels in control of its credit card use is linearly related
to the money management practices employed by a family, was
supported at the . 01 level of significance. A strong direct relationship
(significant at the .001 level) was shown to exist between the
families' feelings of control of credit card use and their budgeting
practices. In the presence of all money management practices, the
frequency with which families used credit cards was shown to have
an inverse effect upon the families' feelings of control, significant
at the .05 level.
The families in the study demonstrated control of their credit
card use, and used them for convenience rather than for installment
debt instruments. Credit cards were regarded by a large number of
families as a temptation to overspend.