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NBRI
2,2 The impact of attitude variables
on the credit debt behavior
Lili Wang and Wei Lv
120 Antai Economic and Management, Shanghai Jiao Tong University,
Shanghai, China, and
Received 1 December 2010 Lin Jiang
Revised 4 January 2011
Accepted 10 February 2011
Beijing SDR Co., Ltd, Shanghai, China

Abstract
Purpose – The present research attempts to address what kinds of attitude variables influence
individuals’ debt behavior. Although credit card debt has been extensively documented recently, the
main focus is on the pure amount of debt. Little research is concerned with the source of credit card
debt. This research tries to investigate how different attitude variables affect revolving credit card use
and petty installment use which are two main sources of credit card debt. It is generally accepted that
attitude variables are one of the causes of credit card misuse. But there is no research to compare the
differential effect of each factor in one model. The present research tries to use statistical method to
find out the distinctive effect of each attitude factor.
Design/methodology/approach – The study was conducted by using mail-in questionnaires,
which were sent to credit card holders who were using or had used either revolving credit or petty
installment plans. After reliability and validity tests, stepwise regression model has been used to test
the differential effect of each attitude variable.
Findings – According to regression functions, it was found that attitude variables had a wonderful
explanatory power in accounting for revolving credit use and petty installment use. Specifically, it was
found that revolving credit use and petty installment use were closely related to attitudes about credit
card, money, and debt. Risk attitude efficiently predicted petty installment use; however, it did not
correlate with revolving credit use. Meanwhile, it was found that all of the attitude factors account for
82.1 percent of variance for revolving credit use. In contrast, they account for 41.6 percent of variance
for petty installment use. The findings shed light on the role of attitude variables in debt behavior.
Moreover, the paper identifies the specific role of different attitude variables, which has great
implications for practice.
Originality/value – Existing research has significantly clarified credit card debt issues, but there
are still some gaps to fill in. For one, although the previous literature tests both separate effects and
joint effects, it ignores some important variables, such as attitude variables. Meanwhile, previous
research focuses on single variables most of the time, such as credit card attitude and debt attitude,
and little research has simultaneously considered a bunch of attitude factors simultaneously.
In summary, further exploration of the attitude factors is necessary. Additionally, previous
researchers have focused only on the final consequences of credit usage – the outstanding balance
or credit card debt rather than the behavior which triggers credit card debt. The present research aims
to address these two questions.
Keywords Debt and credit, Consumer behaviour, Attitudes
Paper type Research paper

Nankai Business Review The authors wish to thank all the students in their team for their assistance with data collection.
International
Vol. 2 No. 2, 2011 Preparation of this paper was supported by China’s Ministry of Education Program “Research on
pp. 120-139 the consumer’s personal credit based on the behavior of using revolving credit” (07JA630057)
q Emerald Group Publishing Limited
2040-8749
and JMS ( Journal of Marketing Science, Chinese). In addition, the authors would like to thank all
DOI 10.1108/20408741111139909 of the reviewers for their great suggestions and hard work.
1. Instructions Attitude on
In mainland China, the consumers’ debt ratio of householders in some developed cities, credit debt
such as Shanghai and Beijing, reached 155 percent in Shanghai and 122 percent in
Beijing in 2003 (Liu, 2004), which outstrips the rate of consumer debt in the USA.
Mortgages on houses and car payments are the main components of consumer debt
in China. In addition to these types of debt, credit card debt is gradually becoming
more prevalent. According to a report on the behavior of credit card holders in, 2008, 121
20.5 percent of credit card holders use revolving credit and 10.3 percent use petty
installment. The TGI index[1] for revolving credit[2] users in Shanghai, Guangzhou and
Beijing is 130, 108 and 44, respectively. Meanwhile, the TGI index for petty installment[3]
users is 132, 118 and 63, respectively, in Shanghai, Guangzhou and Beijing.
Although consumer credit card debt is becoming a hot topic in China, there is little
research on Chinese consumer credit card debt. In Western countries, many studies
discuss the consumer debt problem from a variety of perspectives. There exist at least
two separate lines of inquiry in recent research in this field. The earliest and richest
research deals with categories of credit card holders. At an early stage of the research,
Plummer (1971), Adcock et al. (1977) and Crook et al. (1992) divided populations into
credit card holders and non-credit card holders. Later, scholars found that such
categorizations are not clear enough to discriminate the population’s motivation and
behavior. Thus, they divided credit card holders into categories of convenience holders
and credit-oriented holders (revolving credit holders) (Canner and Cyrnak, 1985).
The second line of research focuses on the factors which may influence consumer’s
credit card use behavior. Different research considers different factors. Mathews and
Slocum (1969) tested the effect of social class. Plummer (1971) identified life style
patterns as predictors. Davies and Lea (1995) investigated the influence of credit
attitude. However, some research indicated that the isolated effect of different factors
cannot effectively account for consumer credit use behavior. Therefore, investigation of
the combined effect of these factors becomes necessary. Dessart and Kuylen (1986)
investigated the combined effect of the institutional factors, the socio-economic factors,
the psychology factors, and decision-behavior factors. Lea et al. (1993) discussed the
effect of economic resources, economic need, social factors, attitude forming, and
attitude variables on credit debt. Tokunaga (1993) discussed whether background
and psychological characteristics exerted an impact on use and abuse of credit cards.
Zhu and Meeks (1994) investigated the effects of low-income families’ ability and
willingness to use consumer credit on subsequent outstanding credit balances. Kim and
Devaney (2001) found that the determinate of outstanding balance among a credit card
revolver included consumption needs, current and future resources, the interest rate and
the consumer’s preference. Chien and Devaney (2001) investigated the consumer debt
from demographic, economic and attitude variable perspectives.
Although tremendous factors have been identified, little research pays special
attention towards discriminating what kinds of factors are more powerful. Extant
research has documented that the dramatic growth in credit card use since the 1980s has
been, to some extent, due to the sharp change in consumers’ attitudes toward credit cards
(Canner and Cyrnak, 1985; Godwin, 1997; Norton, 1993; Park, 1993). These scholars have
argued for a generational shift in attitudes, with traditional hostility to debt now
breaking down. The current new generation grew up in the easy-credit 1980s and might
be expected to be relatively tolerant of credit and debt. Does such change only occur in
NBRI Western countries or does it also happen in China? A total of 20 years’ research by Yang
2,2 indicated that the Chinese are experiencing an attitude change right now. Thus, we are
interested in what kinds of attitude induce Chinese people to fall into credit card debt
(Lu et al., 2009).

2. Review of literature and research hypothesis

122 2.1 Review of previous research
Credit card use (Merskin, 1998; Livingstone and Lunt, 1992; Tokunaga, 1993; Neuner
et al., 2005; Wiener et al., 2007) and credit card debt (Zhu and Meeks, 1994; Dessart and
Kuylen, 1986; Berthoud and Kempson, 1992; Yang et al., 2007; Norvilitis et al., 2006;
Kamleitner and Kirchler, 2007) has been extensively documented in extant research.
Although the majority of findings are mainly from Western scholars, special attention
has been paid to credit card use in developing countries (Barker and Sekerkaya, 1993;
Kaynak and Harcar, 2001; Goyal, 2006; Wickramasinghe and Gurugamage, 2009)
especially in China right now. Jiang and Ren (2003, 2004) and her colleagues investigated
the impact of demographic variables, money attitude and credit card attitude on
overdraft behavior. Tu et al. (2008) proposed a conceptual model to account for “credit
slaves” in mainland of China. But, the outstanding balance mentioned by Jiang, included
the outstanding balance within free-interest grace. Such outstanding balances cannot
contribute to credit card debt (Garman and Forgue, 2000). For Tu et al. ’s research, he put
up a conceptual model and indicated that “there exists difference among different credit
card holders who are credit slaves”. He proposed that to some extent, the emergence of
credit slaves was highly related to attitude variables. But he neither pointed out what
kinds of attitude factors nor empirically tested them.
Thus, although existing research has significantly clarified the credit card debt issue,
there are still some gaps to fill in (Wang et al., 2011). For one, although the previous
literature tests both separate effects and joint effects, it ignores some important
variables, such as attitude variables. Meanwhile, previous research focuses on single
variables most of time, such as credit card attitude (Tokunaga, 1993) and debt attitude
(Lea et al., 1995); little research considers a bunch of attitude factors simultaneously.
In summary, further exploration of the attitude factors is necessary. Additionally,
the previous researchers focus only on the final consequences of credit usage – the
outstanding balance or credit card debt rather than the behavior which triggers credit
card debt. The present research aims to address these two questions.

2.2 Hypothesis
2.2.1 The impact of money attitude on credit card debt. A lot of research has been
documented on money attitude and different scales measuring money attitude have
been developed. In the present research, we adopted the money attitude scale produced
by Yamauchi and Templer (1982). The reasons are as follows:
.
Furnham’s scale lacked consumer personality information, and also some
research complained that it was difficult to increase the internal reliability of
Furnham’s scale.
.
Yamuchi and Templer (1982)’s scale has been extensively used, and a lot of
research claimed that it had a high construct validity and it was stable (Robert
and Sepulveda, 1999a, b).
Yamauchi and Templer (1982) explored that money attitude had four dimensions: Attitude on
(1) Power-prestige. Research found that individuals scoring highly on this dimension credit debt
normally regarded money as a tool to influence or impress others. They even
regarded money as the symbol of success. Tokunaga (1993) indicated that the
intense credit user:
.
took money as the source of power and prestige;
123
.
were more likely to present anxiety; and
.
paid little attention to saving.

For a lot of people, money means power, ownership of products and services and
a symbol of social status. In line with Tokunaga’s (1993) findings, Markovich and
DeVaney (1997) contended that revolving credit users were more likely to buy
expensive products. Consumers try to display their social power through their
possessions. When consumers’ income cannot meet their demand in pursuit of
power and prestige, credit cards will facilitate consumers to meet their demand.
Consumers can buy luxury products, high quality products to present their social
status through credit card use. Thus, we hypothesize that:
H1a1. The higher one scores on power-prestige, the more often one uses revolving
credit.
H1a2. The higher one scores on power-prestige, the more often one uses petty
installment.

(2) Retention. Yamauchi and Templer (1982) indicated that individuals scoring
highly on this dimension tended to cautiously use money and had financial
planning. Those individuals prefer “save first, spend later”. Thus, we propose
that:
H2a1. The higher one scores on retention, the less often one uses revolving credit.
H2a2. The higher one scores on retention, the less often one uses petty installment.

(3) Distrust. Yamauchi and Templer (1982) described persons scoring highly on this
factor as hesitant, suspicious and doubtful regarding situations involving
money. They lacked faith in one’s ability to make efficient purchase decisions.
Meanwhile, they were sensitive to price. In contrast, Tokunaga (1993) found that
intense credit users displayed low price sensitivity. All in all, we can see that
individuals with high-level distrust are less trusting of credit cards, thus they
use credit cards less often, and even avoid using them. Thus, we propose that:
H1c1. The higher one scores on distrust, the less often one uses revolving credit.
H1c2. The higher one scores on distrust, the less often one uses petty installment.

(4) Anxiety. Individuals with high levels of anxiety tend to attribute anxiety to
money, and they are always worried that they do not have enough money. Thus,
in order to avoid anxiety, they try to get enough money to protect themselves.
Owing to the painlessness of credit card use (Eastwood, 1975), those scoring
NBRI highly on anxiety would like to use credit cards more often than those who score
2,2 low on anxiety. Thus, we hypothesize that:
H1d1. The higher one scores on anxiety, the more often one uses revolving credit.
H1d2. The higher one scores on anxiety, the more often one uses petty installment.

124 2.2.2 The impact of the satisfaction with lief on credit card debt. Lindqvist (1981)
empirically tested Katona’s hypothesis that the perceived satisfaction with the economy
and life was positively related to saving, but negatively correlated with the amount of
debt. A great deal of research indicated that current satisfaction with the economy and
life easily generated the feeling that “Content is happiness”, which made individuals
believe that it was unnecessary to spend more to increase satisfaction. To some extent, it
was beneficial to reduce the likelihood of being in debt and the amount of debt.
In contrast, Norvilities et al. (2003) researched credit card debt among students and
found that the amount of debt was not related to the satisfaction of life. Goal theory
emphasizes that when one’s demand is met, the quality of life will be high which will
produce a high level of happiness. Happiness will increase an individual’s satisfaction
with life. When one is in a high level of satisfaction with life, s/he hopes to enjoy it and
keep it constant. To guarantee the level of satisfaction with life, an individual will refuse
to adopt risk behaviors. From an economic perspective, we can see that it is an equivalent
state. Thus, we propose that:
H2a. An individual with a high level of satisfaction with life would use
revolving credit less often than an individual with a low level of satisfaction
with life.
H2b. An individual with a high level of satisfaction with life would use petty
installment less often than an individual with a low level of satisfaction with life.

2.2.3 The impact of attitude toward credit card on credit card debt. Many scholars claim
that attitude toward credit card is the most vital variable in predicting credit debt.
Berthoud and Kempson (1992) indicated that credit card attitude showed a strong
relationship with credit card debt. Positive attitudes toward credit cards were more
likely to be associated with having debt. It is important to recognize though, that those
who own more do not show a simple endorsement of the pro-credit view over the
anti-debt view. Rather, those who own more often recognize the problems which credit
may bring, but still feel that credit is necessary, as it is better to have possessions one
wants or needs now than to save up for them. This phenomenon is supported by
Davies and Lea (1995). Their investigation on credit debt among students found that
those who were in debt almost always had a positive credit attitude. Waler (1996) and
Chien and Devaney (2001) also supported this opinion. However, this kind of positive
relationship is not always the case. Tokunaga (1993) indicated that, compared to
households who do not have debt or never use credit cards, households with debt or
credit card usage were more likely to manifest a low-positive attitude toward credit
debt. Additionally, Zhu and Meek’s (1994) investigation on low-income family debt did
not reveal any relationship between credit attitude and credit debt. Such an
inconsistent result to some extent validates Ajzen and Fishbein (1977)’s assertion that
the relationship between attitude and behavior is complicated.
 Attitude has three components: affective, cognitive and behavior. A lot of research Attitude on
has argued that credit card use is not rational behavior. Researchers have assumed that credit debt
with increasing of knowledge about revolving credit and petty installment, an
individual would use these functions less. Hayhoe et al. (2005) posited that an
individual scoring highly on cognitive dimension meant that the individual knew a lot
about the operation of credit cards. An individual scoring highly on affective
dimension represented that an individual enjoyed the feeling of possession of credit 125
cards and would like to use credit cards. Individuals scoring highly on behavior
dimension represented that the individual would like to have more credit cards. Thus,
we hypothesize that:
H3a1. Individuals scoring highly on the cognitive dimension of credit cards would
use revolving credit less often.
H3a2. Individuals scoring highly on the cognitive dimension of credit cards would
use petty installments less often.
H3b1. Individuals scoring highly on the affective dimension of credit cards would
use revolving credit more often.
H3b2. Individuals scoring highly on the affective dimension of credit cards would
use petty installments more often.
H3c1. Individuals scoring highly on the behavior dimension of credit cards would
use revolving credit more often.
H3c2. Individuals scoring highly on the behavior dimension of credit cards would
use petty installments more often.
2.2.4 The impact of attitude toward debt on credit card debt. Another attitude variable
considered in the consumer credit card debt literature is consumer attitude toward
debt. Since 1974, Herendeen has predicted that more households would behave like
businesses or governments with respect to debt. That is, they would maintain safe
ratios of debt to assets while continuing to repay old debt and re-borrowing as the need
arises. Walker (1995) identified that negative attitudes toward debt were positively
associated with getting into debt. However, some studies conjectured that, to some
extent, a consumer’s debt attitude was negatively associated with credit card debt.
Unfortunately, this hypothesis did not have empirical support (Lea et al., 1993;
Livingstone and Lunt, 1992).
The positive relationship between debt attitude and credit card debt can be
explained by some of the latest theories. Double-entry mental account theory indicated
that individuals would worry about a credit card when they initially use it, and
payment would reduce the happiness of consumption. But a credit card separates
consumption and repayment. Thus, it will produce a buffer for the pain of payment
(Prelec and Loewenstein, 1998). Meanwhile, reactance theory holds that when an
individual’s freedom is eliminated or threatened, an individual will experience
psychological reactance, a motivational state directed toward the reestablishment of
the freedom. Thus, based on reactance theory, we can assume that when an
individual’s demand cannot be met, a negative attitude toward debt will produce more
pain for them. In such situations, it is better for a consumer to hold a positive attitude
NBRI toward debt. Such a positive attitude will facilitate individuals to use revolving credit
2,2 and petty installments more often. Thus, we propose that:
H4a. The more positive attitude toward debt one has, the more often one uses
revolving credit.
H4b. The more positive attitude toward debt one has, the more often one uses petty
126 installments.
2.2.5 The impact of risk attitude on credit card debt. Indivdiuals hold different attitudes
to risk. Some believe that high risk means high benefits. In order to pursue high
benefits, they like to take high risk. Others think high risk is unacceptable, so they
represent the risk averse. For credit use, some regard it as pure consumption, but
others think of it as an investment based on consumption. No matter which options are
dominant, they share the common metirc that credit card use depends on risk attitude.
Owing to different perceptions of risk toward revoling credit and petty istallment, an
individual will behave differently. In the present research, we adopted Mao’s (1988)
risk attitude scale to measure risk attitude. The main reasons for adopting this scale
are as follows:
.
It describes risk atitude from three aspects: benefit-risk balance, curiosity, risk
endurance[4]. It represents different options for risk: investment or consumption.
.
It has been broadly used in Taiwan and has testified that it had a high internal
reliability.

The main reason for individuals using revolving credit and petty installments is
that their demands cannot be met. Meanwhile, they have a thirst for meeting their
demands. Thus, they would like to “use tomorrow’s income to pay today’s bill”.
From double-entry mental accounting theory, individuals tend to make a trade-off
between the benefits of credit card use and the pains of future payment. Meanwhile,
consumers understand that in order to meet their demands, they have to pay for it.
They will to take the cost of using revolving credit and petty installments if they
believe it worthwhile. Thus, we assume that:
H5a1. Individuals scoring highly on benefit-risk balance dimension of risk attitude
will use revolving credit more often.
H5a2. Individuals scoring highly on benefit-risk balance dimension of risk attitude
will use petty installments more often.
As a new payment tool, the extensive use of credit cards, to some extent, can be
attributed to an individual’s curiosity. As reports show, consumers tend to use petty
installments to buy durable and high technology products (Mathews and Slocum,
1969). Those who have a high level of curiosity are eager for experiencing such
products when they are launched. So we assume that:
H5b1. Individuals scoring highly on curiosity dimension of risk attitude will use
revolving credit more often.
H5b2. Individuals scoring highly on curiosity dimension of risk attitude will use
petty installments more often.
Some research argued that extensive use of credit cards can, to some extent, be attributed Attitude on
to the sharp increase in risk tolerance of the new generation (Leigh-Pemberton, 1989). credit debt
In other words, a high level of risk tolerance drives individuals to use revolving credit
and petty installments more often. Thus, we assume that:
H5c1. Individuals scoring highly on risk tolerance dimension of risk attitude will
use revolving credit more often.
127
H5c2. Individuals scoring highly on risk tolerance dimension of risk attitude will
use petty installments more often.
Based on a literature review, we incorporated potential attitude factors into our model
and tried to discriminate the impact of these factors on revolving credit use and petty
installment use. Our conceptual model is shown in Figure 1.

3. Methodology
Before the formal survey, we did a pilot survey[5] to test the reliability and validity of
the attitude scales. After two months, we received 199 attitude questionnaires. Based
on the Cronbach’s a reliability analysis and factor analysis, we deleted several items
and found that the reliability for each factor was higher than 0.7. Additionally, the
loading of each variable was higher than 0.5, which meant that each scale had high
convergence validity. Each item belonged to one factor and there was no case where
one item belonged to several factors simultaneously. This pilot survey established that
each scale had high discriminant validity. We then began collecting data through the
commercial bank.
Our subjects needed to meet two requirements: first, s/he must either currently use a
credit card or have used one in the past; second, s/he must have used revolving credit or
petty installment credit more than once. In order to get high quality subjects, we
entrusted a commercial bank to send the questionnaire to the credit card holders who
had used revolving credit or petty installments. The survey was conducted from June
2008 to December 2008. 1,800 attitude questionnaires were sent. 573 personality
questionnaires were received; the response rate was 31.8 percent. Meanwhile, we also
called people who did not respond. The reasons for non-response included wrong
addresses or otherwise unreachable subjects. We also used the database to confirm that

Money attitude

The satisfaction with Revolving credit use

life

Credit card attitude

Credit card debt

Debt attitude
Figure 1.
Risk attitude Petty installment use The conceputal model of
the impact of attitude
variables on credit card
Unrealistic optimism debt
NBRI our sample was representative. An ANOVA analysis demonstrated that there was no
2,2 significant difference in age and gender[6] between subjects who did not respond
and subjects who took the attitude questionnaire (F(1,572) ¼ 0.75, P ¼ 0.387 and
F(1,572) ¼ 1.62, P ¼ 0.204, respectively). So, our data does not have a response bias
problem.
Dependent variable: just as we mentioned above, credit debt behavior was
128 measured through two specific behaviors – revolving credit use and petty installment
credit use. Based on extant research (Browers, 1979; Robb and Sharpe, 2009), we used
four items to measure the behavior such as “The frequency that I didn’t repay my
credit balance in the free-of-interest period was_________” where “1” meant it never
happened, “2” meant only once, “3” meant once in a while, “4” meant frequently, and
“5” meant almost every month. We averaged these four items to create a revolving
credit use index (a ¼ 0.85) and petty installment use index, respectively, (a ¼ 0.76).
Independent variables: attitude factors were measured by the published scales,
which are listed in Table I.

4. Results
4.1 Sample and reliability, validity test
The majority of our subjects were male, younger than 35, corporate personnel and
students and had a bachelor’s degree. The majority of the subjects had a monthly
income lower than ¥4,000. Most of the subjects perceived themselves as low-class
people. Most of the subjects were single and younger than 34.
We used the seven-point Likert scale to measure our attitudes and factors.
Meanwhile, we conducted the confirmatory factor analysis to compute composite
reliability, discriminant, and convergence validity tests. The descriptive statistics,
composite reliability, and average variance extracted (AVE) are listed in Table II.
First of all, all of Cronbach’s a were higher than 0.7, which meant that reliability was
satisfactory. Additionally, we can see that the goodness-of-fit statistic of attitude and
personality factors were not high, but were acceptable. Meanwhile, all of the composite
reliabilities were higher than 0.5, which met the requirement of Bagozzi and Yi (1988).
Then, we used AVE to verify the discriminant and convergence validity. All AVE
was higher than 0.5, which indicated that the scales had high quality of convergence
validity (Bagozzi and Yi, 1988). From Table III, we found that correlation coefficients
which were below the diagonal line were all smaller than the square root of AVE, which
was listed in the diagonal line. According to the standard of discriminant validity
proposed by Fornell and Larcker (1981), all of the scales had high discriminant validity.

Variable Source of scale

Money attitude Yamauchi and Templer (1982)

Table I. Satisfaction with life Diener et al. (1985)
Measurement scale of the Credit attitude Xiao et al. (1995)
attitude factors and Debt attitude Lea et al. (1995)
personality factors Risk attitude Mao (1988)
 Attitude on
Average
Composite variance credit debt
Standard reliability extracted
Variable Dimension Cronbach’sa Mean error (CR) (AVE)

Money attitude Power-prestige 0.708 3.404 1.0803 0.869 0.570

Retention 0.822 4.698 1.2873 0.845 0.578 129
Distrust 0.715 3.818 1.1229 0.854 0.539
Anxiety 0.757 3.904 1.2698 0.767 0.525
Debt attitude 0.812 4.079 1.1415 0.924 0.577
Credit attitude Affective 0.833 4.379 1.3811 0.879 0.645
Cognitive 0.772 3.355 1.2704 0.8 0.538
Behavior 0.809 2.885 1.2396 0.866 0.685
The satisfaction
with life 0.779 3.271 1.2079 0.828 0.547
Risk attitude Benefit-risk balance 0.789 5.310 1.033 0.835 0.559
Curiosity 0.710 3.612 1.2055 0.750 0.500 Table II.
Risk tolerance 0.816 4.173 1.5409 0.858 0.671 Descriptive statistics and
reliability of attitude
Notes: Goodness-of-fit statistic ¼ 2134.834; x 2 =df ¼ 1.747; GFI ¼ 0.877; AGFI ¼ 0.847; RMSEA ¼ factors and personality
0.056; CFI ¼ 0.903, NFI ¼ 0.883 factors

4.2 Stepwise regression

We used stepwise regression (Neter et al., 1996) to test the effect of the attitude factors.
Before regression analysis, we tested whether there was serial correlation and
multicollinearity. DW scores in the regression function of revolving credit use and
petty installment use were 1.771 and 1.796, respectively, near to 2, which meant that
there was not a serial correlation in the above two regression functions. The tolerance
in the revolving credit use regression function was between 0.39 and 0.922. The
tolerance in petty installment use regression function was from 0.633 to 0.924. All of
the tolerances were larger than 0.1. Meanwhile, variance inflation factors (VIF) in the
revolving credit use function ranged from 1.085 to 2.562. VIF in the petty installment
use regression function ranged from 1.083 to 1.580. All of the VIFs were smaller than
ten. The value of tolerance and VIF demonstrated that there was not multicollinearity
between attitude variables.
As Table IV shows, the behavior dimension of credit card attitude, power-prestige
dimension of money attitude, debt attitudes, affective and cognitive dimension of credit
card attitude, and retention dimension of money attitudes were selected by the
stepwise regression procedure as predictors at the 0.05 significance level.
Consistent with Tokunaga (1993)’s results, for money attitude, the power-prestige
dimension was positively related to the frequency of revolving credit use, supporting
H1a1. Just as Belk (1998) indicated, “consumers demonstrate their social power by
displaying their material wealth because wealth is the best indicator of power in
modern society.” But the growth rate of income and wealth cannot catch up with the
growth rate of demand, so these people are willing to use revolving credit to meet their
demands. There are two reasons that can be used to account for this phenomenon. On
the one hand, face is more important than high interest rate for Chinese. On the other
hand, for revolver, it is worthwhile paying high interest to use revolving credit to keep
their taste and high status.
 2,2

130
NBRI

Table III.

of attitude variables
Discriminant validity test
PP RE DI ANS DA AF CO BE SL BR CU RE
a
PP 0.755
RE 20.658 * * 0.760
DI 0.046 2 0.005 0.734
ANS 0.151 * 2 0.064 0.306 * * 0.725
DA 0.405 * * 2 0.328 * * 2 0.007 20.031 0.770
AF 0.483 * * 2 0.356 * * 0.087 20.042 0.399 * * 0.803
CO 20.052 0.038 0.084 0.170 * * 0.032 2 0.151 * 0.733
BE 0.643 * * 2 0.450 * * 0.042 0.033 0.421 * * 0.595 * * 0.006 0.828
SL 20.021 0.172 * * 2 0.214 20.116 2 0.122 0.04 0.321 * 20.012 0.740
BR 20.078 2 0.213 * * 2 0.113 20.121 0.223 0.314 * * 0.378 * * 0.416 * * 20.217 * * 0.748
CU 20.114 2 0.164 * * 2 0.117 20.067 0.216 * 0.351 * * 0.317 * * 0.382 * * 20.193 * * 0.214 * * 0.707
RE 20.026 0.163 0.006 0.072 0.354 * * 0.326 * * 0.332 * * 0.411 * * 0.135 * 0.133 * * 0.148 * * 0.819
a
Notes: Significance at: *p , 0.05, * *p , 0.01, and * * *p , 0.001; values in the diagonal line were the square root of AVE; values below the diagonal
line were the correlation coefficients; PP, power-prestige; RE, retention; DI, distrust; ANS, anxiety; DA, debt attitude; AF, affective; CO, cognitive;
BE, behavior; SL, the satisfaction with life; BR, benefit-risk balance; CU, curiosity; RE, risk endurance
 Revolving credit (n ¼ 573)
Variable Model 1 Model 2 Model 3 Model 4 Model 5 Model 6

Behavior dimension of credit card attitude 1.128 * * * 0.79 * * * 0.719 * * * 0.621 * * * 0.634 * * * 0.633 * * *
Power-prestige dimension of money attitude 0.51 * * * 0.453 * * * 0.424 * * * 0.418 * * * 0.356 * * *
Debt attitude 0.254 * * * 0.219 * * * 0.227 * * * 0.22 * * *
Affective dimension of credit card attitude 0.172 * * * 0.172 * * * 0.17 * * *
Cognitive dimension of credit card attitude 20.081 * 2 0.081 *
Retention dimension of money attitude 2 0.094 *
F-value 526.419 410.234 323.007 268.030 218.726 185.716
F-value change 93.029 * * * 34.394 * * * 21.2 * * * 4.726 * 4.503 *
Adjusted R 2 0.685 0.772 0.8 0.815 0.818 0.821
The add value of adjusted R 2 0.686 * * * 0.088 * * 0.028 * * 0.016 * * 0.004 *
Notes: Significance at: þ p , 0.1, *p , 0.05, * *p , 0.01, and * * *p , 0.001; the numbers in the table represented the beta values

regression revolving
credit use on attitude
credit debt

variables
The results of stepwise
Attitude on

131

Table IV.
NBRI The retention dimension of money attitude was negatively related to the frequency of
2,2 revolving credit use, which indicated that the higher one scored on the retention
dimension of money attitude, the less often one used revolving credit, supporting H2a1.
Yamauchi and Templer (1982) argued that individuals who scored highly on the
retention dimension intended to prudently use money and always had a financial plan
(Tokunaga, 1993; Stone and Maury, 2006). For such a group of people, on the one hand,
132 they are used to setting up shopping budgets and schedules for what to buy and when
to buy, which inhibits impulsively shopping and overspending. On the other hand,
they prefer to reduce expense, rather than use high interest of revolving credit.
It was pity that distrust and anxiety did not enter the regression functions. So there
was no significant impact of distrust and anxiety on revolving credit use, inconsistent
with H1c1, H1d1. For high distrust people, they doubt that they have the ability to make
right and efficient purchase decisions, so they are used to inhibiting their shopping.
Meanwhile, they are suspicious about credit cards, which makes them less likely to open
a credit card. Based on these two reasons, it is not difficult to understand why distrust
did not exert influence on revolving credit. Frequency and Q-Q Plots analysis were used
to test this deduction. We found that Kurtossi , 0, which represented that people with
high distrust were not included in our sample. Initially we believed that people with
high anxiety would try to use money to protect them from anxiety, so they would like to
open more credit cards. An ANOVA analysis of the number of credit cards showed that
the main effect of anxiety on the number for credit cards was not significant
(F(1,572) ¼ 0.597, P ¼ 0.893), which meant that our initial deduction was not supported.
We suspected that it might be attributed to individual traditional values (Lu et al., 2009)
which hindered them from using money to protect themselves.
Satisfaction with life did not enter regression function either, which represented that
satisfaction with life cannot significantly predict revolving credit use, inconsistent
with H2a. In other words, it might be that the frequency of using revolving credit did
not depend on their current satisfaction with life. It is generally accepted that financial
situation is not the only source of satisfaction with life. Thus, being poor in material
wealth did not hinder an individual’s satisfaction with life. For individuals, an
interesting job, lovely family, and adorable child might have a higher impact on their
satisfaction with life.
For credit card attitudes, the behavior dimension and the affective dimension of
credit attitude were positively correlated with the frequency of revolving credit use
(H3b1, H3c1), but the cognitive dimension was negatively related to the frequency of
revolving credit use (H3a1). For the impact of cognitive dimension on credit card
attitudes, our result was in line with extant literature which has argued that those who
score highly on the cognitive dimension of credit card attitude might have more
knowledge of credit cards, thus they would not use revolving credit often due to its
high interest rates (Dessart and Kuylen, 1986; Norvilities et al., 2003; Norvilitis et al.,
2006). For the affective and behavior dimensions, it might be that participants who like
credit cards more would have more credit cards, which would push them to use
revolving credit. It can be attributed to the painlessness of credit card use (Hirschman,
1979; Wickramasinghe and Gurugamage, 2009).
Debt attitude was positively related to the frequency of revolving credit use,
supporting H4a. People who take a positive attitude towards debt normally have a high
tolerance of debt which makes them underestimate the severity of debt and have Attitude on
less sensitivity to debt. credit debt
All three dimensions of risk attitudes were not selected by regression functions,
which showed that risk attitude cannot effectively predict revolving credit use,
inconsistent with H5a1, H5b1, and H5c1. For our understanding, consumers might not
regard revolving credit use as an investment decision. Only once they are in a corner,
will they use revolving credit. Thus, frequency of using revolving credit was not 133
related to risk attitudes (Table V).
For petty installment use, significant attitudes overlapped but also diverged from
those connected to revolving credit, which indicated that revolving credit use and petty
installment use overlapped but were not identical to each other. Person correlation
analysis showed that revolving credit use and petty installment use were positively
correlated with each other (b ¼ 0.236, p , 0.01). The profit-risk-balance dimension of
risk attitude, debt attitude, retention dimension of money attitude, behavior and
cognitive dimension of credit card attitude were selected by the stepwise regression
procedure as predictors at the significance level of 0.05.
For money attitude, only the retention dimension was selected by the regression
function. Our result was consistent with extant literature that retention was negatively
related to the frequency of petty installment use (Tokunaga, 1993; Norvilitis et al., 2003,
2006). Just as we mentioned that people who scored highly on retention normally had a
good plan for their life and expenses (Yamauchi and Templer, 1982). Owing to such
good habits, they often have a good plan on durable products and staple commodity
purchases. So it is not necessary for them to use petty installments to buy durable
products and staple commodities. Meanwhile, such groups of people often have some
savings, which further inhibit them from using petty installments. Power-prestige,
distrust, and an anxiety dimension of money attitude were not selected by the
regression function, which meant that all of these dimensions cannot used to predict
the frequency of petty installment use, inconsistent with H1a2, H1c2, and H1d2.

Petty installment use (n ¼ 837)

Variable Model 1 Model 2 Model 3 Model 4 Model 5

Profit-risk-balance dimension of risk

attitude 0.691 * * * 0.493 * * * 0.319 * * * 0.183 * * * 0.167 * * *
Debt attitude 0.494 * * * 0.474 * * * 0.426 * * * 0.435 * * *
Retention dimension of money
attitude 20.256 * * * 2 0.25 * * * 2 0.248 * * *
Behavior dimension of credit card
attitude 0.257 * * 0.266 * *
Cognitive dimension of credit card
attitude 2 0.161 *
F-value 85.751 71.052 52.143 42.129 35.528
F-value change 41.826 9.37 7.7 5.756
Adjusted R 2 0.259 0.367 0.388 0.405 0.416
The add value of adjusted R 2 0.262 * * * 0.024 * * 0.019 * * 0.014 * * Table V.
The result of stepwise
Notes: Significance at: þ p , 0.1, *p , 0.05, * *p , 0.01, and * * *p , 0.001; the numbers in the table petty installment use on
represented the beta value attitude variables
NBRI For credit card attitude, the cognitive dimension of credit card attitudes was negatively
2,2 related to the frequency of petty installment use, in line with extant research (Tokunaga,
1993; Norvilitis et al., 2003, 2006). But the behavior dimension of credit card attitude was
positively related to petty installment use. Different credit cards always provide different
installment plans for different products. Individuals who score highly on the behavior
dimension of credit cards would like to open more credit cards. Thus, they might use
134 different credits to meet their different demands in different products. Affective dimension
did not enter the regression function, thus H3a2 was not supported.
In line with Livingstone and Lunt (1992)’s findings that debt attitudes are positively
related to the frequency of petty installment use, H4b was supported. Positive debt
attitude reflects “buy now, pay later” expense value. For those people who score highly
on debt attitude, they are less likely to defer their shopping. They think that it is
worthwhile to own debt to experience right now.
Satisfaction did not enter the regression function again. Just as our above analysis,
although satisfaction with life might be related to financial situation and material
wealth, they are not identical with each other. People might pay more attention to
resources on a spiritual level rather than on a material level. Thus, satisfaction with life
cannot predict petty installment use.
For risk attitude, we found that profit-risk-balance was the first variable entering
into the regression function and that profit-risk-balance could account for almost
26 percent of variance in petty installment use, which indicated that profit-risk-balance
was the most efficient predictor for petty installment use. Individuals tend to make a
trade-off between the benefits of credit card use and the pains of future payment.
Meanwhile, consumers understand that in order to meet their demand, they have to
pay for it. They will take the cost of using petty installments if they believe it is
worthwhile, thus those scoring highly on the profit-risk-balance would more often use
petty installments. Neither curiosity nor risk tolerance were selected by the regression
function, thus H4b2 and H4c2 were not supported.

5. Conclusion and implications

Before discussing the contributions and implications of this study, some limitations
must be mentioned. First, the causality between attitude and behavior is uncertain,
and we have not investigated it. Although we found that some attitude variables
were positively or negatively related to revolving credit use or petty installment use,
we could not be sure that attitude induced behavior or that behavior changed
attitude. In order to clearly understand the causality between attitude and behavior,
serial research is necessary. The second limitation is the measurement of revolving
credit and petty installment use. We are looking forward to using data in the
database of a bank, but we find that in our bank’s database, they do not compute
revolving credit debt from the credit balance. So in our research, we simply measured
the frequency of consumer-perceived revolving credit and petty installment use. The
third limitation is that we solely investigate credit card holders in Shanghai. In the
future, researchers should get data from other provinces to do comparative research.
Last but not least, in the present research, we just focused on attitude variable. It is
worthwhile to integrate other kinds of variable such as demographic variables and
personality variables to discriminate their differential impact and interaction impact
in the future.
 A contribution of this study is that we examined how attitude factors influenced Attitude on
revolving credit and petty installment use and discerned the specific roles of each credit debt
factor. Moreover, different factors also had different impacts on revolving credit use
and petty installment use. Money attitudes, credit attitudes, and debt attitudes
influenced revolving credit use and petty installment use, but petty installment use
was impacted greatly by the profit-risk balance dimension of the risk attitude.
Meanwhile, we found that all of these attitude variables can account for 82.1 percent of 135
variance for revolving credit use. In contrast, they account for just 41.6 percent of
variance for petty installment use. It represented that attitude factors have a powerful
influence of revolving credit use.
Furthermore, a lot of research argued that credit debt can be attributed to income
(Katona, 1975). Davies and Lea (1995) claimed that low-income groups used revolving
credit more often because of their demand for necessities. In contrast, high-income
groups used revolving credit more often because they tended to overestimate their
ability to repay their debt (Livingstone and Lunt, 1992; Baek and Hong, 2004). Through
ANOVA analysis, we found that people with different levels of income would display a
difference in the cognitive dimension of credit attitude (P ¼ 0.001). There was no other
difference. Thus, we can see that the relationship between attitude variables and credit
debt is not driven by income.
These findings should also provide some implications for banks. First, bank should
recognize the importance of money attitude, credit card attitude, debt attitude and risk
attitude in revolving credit and petty installment use to conduct one to one marketing
according to an individual’s attitude. Second, banks should pay special attention to the
special function of credit cards, providing more credit card knowledge to carry out
knowledge marketing. In our research, we found that revolving credit and petty
installments were in great demand but due to lack of knowledge, consumers cannot
correctly use them. Last but not least, we hope marketing departments and risk control
departments will cooperate. It is known that revolving credit interest and petty
installment interest are main sources of profit. But if banks cannot guide individuals to
properly use them, it is difficult for banks to make profits. Even worse, it even will
make banks have more bad debts.

Notes
1. Revolving credit, also known as open-ended credit, is extended in advance of any transaction
so that consumers do not have to reapply each time credit is desired. Thus, revolving credit
debt is the balance that remains after the grace period, but is smaller than the revolving
credit limit.
2. Petty installment credit has wide applications in China. Generally speaking, there are
two types of petty installment credit. One is prior petty installment credit which means
that credit card holders can apply for a petty installment plan before they decide to buy
products (especially durable and electronic products) according to their current financial
situation. The other type is post-purchase petty installment credit which means that when
individuals use a credit card to purchase articles, they believe they can repay before the
next payment due date, so they do not consider applying for a petty installment plan. But
when the payment due date arrives, they find they cannot pay off the balance, so they
decide to use a petty installment plan. Moreover, some commercial banks do not limit
petty installment credit just to durable and electronic products. They even allow
NBRI individuals to use petty installment credit when their outstanding balance in credit card
is huge.
2,2
3. TGI index is also called the “target people index,” which reflects the population in a specific
area, such as geographic area, demographic area, media area, or an area where either the
majority or minority hold power. TGI ¼ [The ratio of the people with specific features in
target area/the ration of people with specific features in the total sample]*Standard 100.
136 4. Attitude toward insurance is another dimension in this scale but the present research is not
related to insurance. Moreover, insurance is so complicated in China. In our research, we
deleted this dimension to avoid confusing our participants.
5. The pretest was just to test the reliability and validity of the attitude scales. So we did not
ask the commercial bank to collect data. We collected data from part-time students in a
continuation education school in Shanghai.
6. The database of the commercial bank has just has age and gender variables.

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Corresponding author
Lili Wang can be contacted at: Wanglili_1984@yahoo.com.cn

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