Antecedents of Consumer Financing Decisions: a Mental Accounting Model of Revolving Credit Usage

Vanessa Gail Perry, University of North Carolina at Chapel Hill
ABSTRACT - Why do some consumer maintain outstanding balances on revolving credit cards while others do not? In this study, we examine whether mental accounting variablesCmental budgeting, self-control, and short-term orientationCare significant predictors of revolving credit use and consumer price consciousness. We develop a multiple-item scale to measure mental budgeting, and use a structural equation modeling approach to test our hypotheses. Our findings generally support our mental accounting framework. In particular, we find that mental budgeting and short-term orientation are associated with higher revolving credit use. People with self-control, and people with low price-consciousness are less likely to use revolving credit.
[ to cite ]:
Vanessa Gail Perry (2001) ,"Antecedents of Consumer Financing Decisions: a Mental Accounting Model of Revolving Credit Usage", in NA - Advances in Consumer Research Volume 28, eds. Mary C. Gilly and Joan Meyers-Levy, Valdosta, GA : Association for Consumer Research, Pages: 13.

Advances in Consumer Research Volume 28, 2001     Page 13

ANTECEDENTS OF CONSUMER FINANCING DECISIONS: A MENTAL ACCOUNTING MODEL OF REVOLVING CREDIT USAGE

Vanessa Gail Perry, University of North Carolina at Chapel Hill

ABSTRACT -

Why do some consumer maintain outstanding balances on revolving credit cards while others do not? In this study, we examine whether mental accounting variablesCmental budgeting, self-control, and short-term orientationCare significant predictors of revolving credit use and consumer price consciousness. We develop a multiple-item scale to measure mental budgeting, and use a structural equation modeling approach to test our hypotheses. Our findings generally support our mental accounting framework. In particular, we find that mental budgeting and short-term orientation are associated with higher revolving credit use. People with self-control, and people with low price-consciousness are less likely to use revolving credit.

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