Cloutier 2019

Journal of Consumer Policy (2020) 43:565–592
https://doi.org/10.1007/s10603-019-09447-8
ORIGINAL PAPER
Consumer Credit Use of Undergraduate, Graduate

and Postgraduate Students: An Application
of the Theory of Planned Behaviour
J. Cloutier 1 & A. Roy

1
Received: 11 July 2019 / Accepted: 27 December 2019 / Published online: 30 January 2020
# Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract
Indebtedness among university students is a recurring problem that needs to be addressed.
Previous studies have illustrated the situation regarding credit cards and college students.
Graduate and postgraduate students have not been studied, although they are also subject
to debt. The aim of this article is to explore the psychological and social factors that
contribute to the adoption of responsible credit practices among undergraduate, graduate
and postgraduate students. The data are from an electronic survey sent by e-mail to
students at two major Canadian universities (n = 1,323). The SEM results indicate that
university students with a high level of self-efficacy in consumer credit are more likely to
avoid risky credit behaviour. In comparison, the intention of undergraduate students to
adopt responsible consumer credit behaviour is more influenced by parents than the
(post)graduate students. The implications for financial education and personal finance
advisors are discussed based on the results obtained.
Keywords Graduate/postgraduate students . Consumer debt . Theory of planned behaviour . Self-

efficacy . Credit practices
Consumer credit products, such as amounts owed to different creditors and for different
purposes (vehicles, furniture and household appliances, credit card balances, money borrowed
from banks, parents and relatives), are complicated to use and understand (Majamaa,
Lehtinen and Rantala 2019). Many consumer credit products are easily accessible to university
students, even if they are not very competent to use them (Huston 2012). This results in a
growing consumer debt that could be avoided by adopting responsible credit practices. To help
students, it is essential to explore the factors that contribute to the intention to adopt respon-
sible practices and avoid risky credit behaviour.
* J. Cloutier
jacinthe.cloutier@fsaa.ulaval.ca
1
Department of Agricultural Economics and Consumer Sciences, Laval University, 2425, rue de
l’Agriculture, Local 4415, Quebec G1V 0A6, Canada
566 J. Cloutier, A. Roy
The use of credit per se is not a bad thing, however, some bad practices are known and have
been studied: credit card balances of $1,000 or more (Hayhoe, Leach, Allen and Edwards
2005; Hayhoe et al. 1999; Lyons 2004, 2008), borrowing money from credit cards, maxing out
credit card limit, using payday loan services, not paying bills on time each month, not paying
off credit card balances in full each month (Xiao et al. 2011) and overspending on a credit card
(Sotiropoulos and D’Astous 2013). Other researchers preferred to explain the adoption of
responsible credit practices such as: tracking monthly expenses, spending within the budget,
saving money each month for the future and investing for long-term financial goals (Serido
et al. 2015; Shim, Barber, Card, Xiao and Serido 2010). The use of credit in an irresponsible
way contributes to increasing the level of debt, which results in serious consequences on the
health and social life of students.
In the province of Quebec (Canada), the debt situation is rather problematic. In the general
population, the average amount of consumer debt in the third quarter of 2019 was $23 520,
which is a 3% increase from the same quarter in 2018 (Equifax 2019). In a recent study among
Quebec undergraduate and graduate students, more than a quarter of them reported having $10
000 or more in consumer debt (Cloutier 2018). This amount is very high considering the
interest rates on this type of debt and the relatively low income of these students. In this study,
66% of undergraduate students and 43% of graduate students have a gross annual income of
less than $20 000 (Cloutier 2018).
Being overindebted can have negative consequences on students’ health, education and
lifestyle (Dettling and Hsu 2017; Friedline, West, Rosell, Serido and Shim 2017; Lusardi,
Mitchell, & Curto, 2010). One of the worst consequences observed is the stress caused by debt
(Grable & Joo, 2006). Stress caused by debt is related to poorer overall health (Nelson et al.
2008; Tran et al. 2018). According to Lusardi et al. (2010), 30% of young US adults say they
frequently worry about their debt. Of these, 29% delayed or decided not to pursue their education
and 22% accepted a job they would not have accepted otherwise because of their debt. In another
study, students who reported high financial stress scored significantly lower on a cumulative
average basis than those who reported low financial stress (Baker and Montalto 2019).
Another phenomenon observed is the return of young adults to the parental residence
(Dettling and Hsu, 2017). Dettling and Hsu used data from the Federal Reserve Bank of New
York Consumer Credit Panel/Equifax collected quarterly over a period from 2005 and 2014
and was limited to young adults between the ages of 18 and 31. They found that time in co-
residence increases with higher delinquency rate and lower credit scores.
This study will provide two unique contributions to the literature on the use of consumer
credit. The first is to identify the psychological and sociological factors that influence the
adoption of responsible credit practices in a rarely studied population: (post)graduate students.
In doing so, it will be possible to compare whether these factors vary between undergraduate
and (post)graduate students. Socio-demographic differences between graduate and undergrad-
uate students could influence personal financial behaviours. Indeed, (post)graduate students
are older, have higher incomes and are more likely to be in a relationship and to no longer live
with their parents (Cloutier 2018; MERS 2015).
Second, most of the literature presents data on credit card use. This study encompasses all
forms of consumer credit that contribute to the debt load of undergraduate and graduate
students. These other credit products can also contribute to debt levels, as they are just as
accessible as credit cards. Moreover, according to Lachance and her colleagues
(Lachance et al. 2005), among young Quebec adults, the number of different debts is a
statistically significant determinant of debt levels.
Consumer Credit Use of Undergraduate, Graduate and Postgraduate... 567
By understanding the factors that influence the intention to adopt responsible credit
behaviour as well as the relationship between this intention and the adoption of irresponsible
behaviours, it could help university students to become aware of their irresponsible behaviours
and avoid making poor decisions that could affect their financial future. The aim of the present
study is to explore psychological and social factors contributing to the intention to adopt
responsible credit practices as well as the relationship between this intention and the adoption
of irresponsible consumer credit behaviour among undergraduate, graduate, and postgraduate
students. This article presents the current state of consumer credit research among university
students, and then explains the Theory of Planned Behaviour (TPB) model used to test the
assumptions on each path between the TPB constructs. Finally, the results are presented and
discussed for their theoretical and sociological contributions.
Determinants of Debt Levels and Responsible Credit Behaviour

Adoption
Studying indebtedness among university students rather than other consumers is interesting for
several reasons. First, they are a vulnerable population because they are inexperienced and do
not have a stable income (Davies and Lea 1995; Roberts and Jones 2001; Xiao et al. 2012).
Also, they have a positive attitude toward credit and are open to debt (Roberts and Jones
2001). Nearly half of undergraduate students have student loans in addition to their consumer
debts, which only increases their stress about their personal finances (Hancock et al. 2012;
Jones 2005; Norvilitis et al. 2006). Moreover, because of their expected salary as a profes-
sional, financial institutions already solicit them and provide them generous lines of credit.
Because of their lack of experience, they are more likely to adopt risky credit behaviours that
may lead to overindebtedness.
Among US undergraduate students with a credit card balance, studies have shown that the
average balance ranges from $1,000 to $3,200 (Borden et al. 2008; Jones 2005; Joo et al.
2003; Mae 2009; Norvilitis and MacLean 2010; Norvilitis and Mao 2012; Norvilitis et al.
2006; Robb and Sharpe 2009). Data from a longitudinal study show that credit card debt and
the percentage of young adult undergraduate students who incurred credit card debt during
their university studies increased over the five years of the survey (Friedline et al. 2017).
Undergraduate students accumulated an average debt of $699 and $657 in 2008 and 2009
respectively, and an average total debt of $2,665 in 2013. The percentage of undergraduate
students who incurred credit card debt while attending university was 18% in 2008 and 55% in
2013. Only two studies presented the average consumer credit debt among college and
university students: one in the United States ($2,483; Jones 2005) and the other in Canada
($8,523; Cloutier 2018).
Many researchers have studied the factors that can influence debt levels. Thus, undergrad-
uate students with a positive attitude toward credit cards have a higher card debt (Hayhoe
2000; Kennedy 2013; Norvilitis and Mendes-Da-Silva 2013; Norvilitis and Mao 2012), while
undergraduate students with a debt aversion are less likely to accumulate debt
(Almenberg et al. 2018; de Gayardon 2019; Norvilitis and Mao 2012). Parents who are
involved in the lives of their children have a positive influence, since their children are less
indebted (Peltier et al. 2013). In addition, undergraduate students who have a high level of
financial self-efficacy have a lower level of debt. Unsurprisingly, undergraduate students
adopting risky practices, such as leaving an unpaid balance on the credit card or having a
maxed out credit card limit, do have a higher level of debt (Cloutier 2018; Norvilitis and
MacLean 2010; Xiao et al. 2012).
Previous studies have shown that undergraduate students who have a positive attitude
toward responsible financial behaviour and a sense of control over their own financial
management are likely to intend to adopt as long as to adopt responsible financial practices
(Shim et al. 2010; Xiao et al. 2011). Parents also play a role in responsible financial
management. When undergraduates feel that their parents want them to control their debt,
they are likely to intend to adopt responsible financial practices (Xiao et al. 2011) and not to
borrow (Chudry et al. 2011). One study examined the influence of friends on the financial
behaviour of undergraduate students. Sotiropoulos and D’Astous (2013) found that when they
feel that their friends overspend on their credit cards, undergraduate students are more likely to
do so as well. Among the variables that influence credit, financial self-efficacy is recognized as
being essential to consider (Cloutier 2018; Farrell et al. 2016; Kuhnen and Melzer 2018;
Limbu and Sato 2019).
A valuable model that could help understand this problem is that of the Theory of planned
behaviour (TPB; Ajzen 1989; Fishbein and Ajzen 2010). The main advantage of this model is
the use of social and psychological factors to explain the problem. In addition, the model can
be improved by adding variables, such as consumer credit debt, which was added in this study.
As we know, only seven studies to date have used the TPB in their personal finance research,
but none of these studies included graduate and postgraduate students in their samples or
studied consumer credit as a whole (Chudry et al. 2011; Kennedy 2013; Sari and Rofaida
2012; Serido et al. 2015; Shim et al. 2010; Sotiropoulos & D’Astous 2013; Xiao et al. 2011).
Table 1 summarizes the results of these studies.
Of the seven studies that used the TPB, only two considered intention, although it is an
important variable explaining the adoption of a behaviour (Fishbein and Ajzen 2010). More-
over, only two of them consider the motivation to comply in assessing the effect of social
norms. Of these studies, five focus on credit cards among US undergraduate university
students and none focus on consumer credit, graduate students or a sample of Canadians. It
is therefore important to examine the situation of Canada’s university students at all levels in
order to increase knowledge about the use of consumer credit.
Conceptual Framework and Hypotheses
The TPB model is designed to predict or understand behaviours with intention as the central
predictor of a particular behaviour. A person who intends to engage in a behaviour is more
likely to do so. According to this theory, three variables influence intention. The first two
variables are psychological: attitude toward behaviour and perceived behavioural control. The
third variable is social: subjective norms toward behaviour. These three variables can be
correlated with each other.
Attitude toward the Use of Consumer Credit
The first psychological variable that could predict the intention to adopt a behaviour is the
attitude toward the same behaviour. Attitude is a latent disposition to respond with some
degree of favourableness or unfavorableness to a psychological object (Krosnick et al. 2019).
Table 1. Previous studies on credit and debt that have used TPB.
References Sample (size) (answer rate) Type of model Main findings
Shim et al. (2010) Undergraduate university students, Consumer socialization of Perception of control → adoption
United States (F = 1301, H = 597) Moschis and Churchill of responsible financial behaviour
(n.d.) (1978), combined with
Fishbein and Ajzen’s (2010)
TPB model
Chudry et al. (2011) Undergraduate university students, TPB, styles of engagement Attitude toward borrowing (financial
England (F = 186, H = 119) (Zaichkowsky 1994) and management dimension) → intention to borrow
(n.d.) decision-making (Kirton 1976) Injunctive social norms (parents) → intention
to borrow
Xiao et al. (2011) Undergraduate university students, Extended TPB Attitude toward the adoption of responsible
United States (F = 745, H = 497) financial behaviours → intention to adopt
(n.d.) responsible financial behaviours
Injunctive social norms (parents) → intention
to adopt responsible financial behaviours
Financial efficacy → intention to adopt
responsible financial behaviour
Financial controllability → intention to adopt
responsible financial behaviour
Consumer Credit Use of Undergraduate, Graduate and Postgraduate...
Intention to adopt responsible financial

behaviours → adoption of risky payment
and borrowing behaviours
Efficacy and financial controllability → adoption
of risky payment behaviour
Adopting risky payment and borrowing
behaviour → credit card debt
Sari and Rofaida (2012) Undergraduate university students, TPB Attitude toward credit card → intention to use
Indonesia credit card
(F = 52, H = 48) Self-efficacy → intention to use the credit card
(n.d.) Intention to use the credit card → risky use of
the credit card
Kennedy (2013) Undergraduate university students, Extended TPB Attitude toward the credit card → intention to
United States (F = 108, H = 35) use the credit card
569
Table 1. (continued)
570
References Sample (size) (answer rate) Type of model Main findings
(n.d.) Perception of control → intention to use

the credit card
Sotiropoulos and D’Astous (2013) Undergraduate university students, TPB Self-efficacy → Overspending on the
United States (F = 91, H = 137) credit card
(53%)
Serido et al. (2015) Undergraduate university students, Consumer socialization (Moschis and Attitude toward responsible financial
United States (F = 492, H = 201) Churchill 1978), combined with behaviour → Adoption of responsible
(n.d.) abbreviated version of TPB financial behaviour
(Fishbein & Ajzen, 2010) Descriptive social norms (parents) → Adoption
of responsible financial behaviours
J. Cloutier, A. Roy
A person’s beliefs about a study object contribute to this attitude and new beliefs can still
change it (Fishbein and Ajzen 2010).
The concept of attitude toward credit was defined differently from one study to another.
Some researchers have used a unidimensional definition (Rutherford and DeVaney 2009; Xiao
et al. 2011) while others have used a multidimensional definition (Chudry et al. 2011; Sari and
Rofaida 2012). Some studies (Hayhoe et al. 2005; Kennedy and Wated 2011) have used the
tripartite definition of attitude toward credit cards, as proposed by Xiao et al. (1995). In this
study, attitude is defined as: the feeling and judgment toward the use of consumer credit.
Several previous studies that have used the theory of planned behaviour model on a sample
of university students have found evidence of a positive link between a positive attitude toward
responsible financial behaviour and the adoption of that same behaviour (Serido et al. 2015;
Shim et al. 2010; Xiao et al. 2012). Furthermore, a positive attitude toward credit is positively
associated with the intention to use a credit card (Kennedy et al. 2012). Therefore, the
following research hypotheses were tested:
H1a: Among university students, a pro-consumer credit attitude is positively associated
with the intention to adopt a responsible credit behaviour.
H1b: Among university students, an anti-consumer credit attitude is negatively associated
with the intention to adopt a responsible credit behaviour.
Subjective Norms Relating to the Use of Credit
Subjective norms represent a person’s perception of the social pressure to behave in a

particular way and the motivation to comply with that pressure (Ajzen 1989). This concept
includes three different variables: injunctive norms, descriptive norms and motivation to
comply (Fishbein and Ajzen, 2010).
Injunctive norms represent the perceived pressure exerted by referents to adopt a particular
behaviour (Fishbein and Ajzen 2010). Chudry et al. (2011) proposed a definition of injunctive
Fig. 1 Hypothesis tested (1 to 7)

norms regarding the use of credit that inspired the one used in this study: the perceived
pressure from referents for responsible use of consumer credit.
Descriptive norms represent the perceived behaviours of others (Fishbein and Ajzen 2010).
The difference with injunctive norms is that instead of feeling pressure, the person may want to
imitate a reference person. The definition used in this study is based on Kennedy (2013): a
person’s perception of how referents use consumer credit.
Motivation to comply represents a person’s desire to behave according to the expectations
of a referent (Fishbein and Ajzen 2010). When there are different referents, Fishbein and Ajzen
(2010) suggest that the influence of these referents should be measured separately. In this
study, the influence of family and friends is measured. Indeed, parents are known to play an
important role in personal finance among undergraduate students, but to our knowledge, we do
not know if this influence is the same for (post)graduates. On the contrary, very little is known
about the role played by friends, while undergraduate students have just left adolescence and
their peers still played an important role.
Previous research has shown that university students who perceive pressure from their
parents to manage their credit responsibly are more likely to adopt responsible financial
behaviour (Xiao et al. 2011) and are less likely to borrow (Chudry et al. 2011). This leads
to the following two hypotheses:
H2a: Among university students, parental injunctive norms are positively associated with
the intention to adopt a responsible credit behaviour.
H2b: Among university students, parental descriptive norms are positively associated with
the intention to adopt a responsible credit behaviour.
A single study reported a statistically significant link between behaviour of friends and
behaviour of undergraduate students. The results indicate that perceiving that their friends
overspend on their credit cards influences university students to do the same (Sotiropoulos and
D’Astous 2013). Thus, it is possible that the opposite is true and that friends may influence
university students to adopt responsible financial behaviour. On this assumption, the following
two hypotheses were elaborated:
H3a: Among university students, friend injunctive norms are positively associated with the
intention to adopt a responsible credit behaviour.
H3b: Among university students, friend descriptive norms are positively associated with the
intention to adopt a responsible credit behaviour.
Perceived Behavioural Control toward the Use of Credit
This variable represents a person’s beliefs about his ability to perform a particular behaviour
(Fishbein and Ajzen 2010). According to Fishbein and Ajzen (2010), perceived behavioural
control includes two ideas: capacity, which is the belief that the person is capable to perform a
behaviour, and autonomy, which is that capacity is in the person’s hands. These ideas are
consistent with Bandura’s (1977, 1982, 1993) concept of self-efficacy: a person’s perceived
ability to succeed in performing a behaviour.
Many definitions appear in previous research on personal finances. Some researchers have
used both ideas, capacity and autonomy (Sari and Rofaida 2012; Xiao et al. 2011), while
others have used a unidimensional definition (Erdem 2008; Shim et al. 2010). In this study, the
definition is based on Bandura’s (1977, 1982, 1993) definition of self-efficacy: the belief that a
person has about their own capacity and control to use consumer credit.
In previous studies, the more students feel in control of their personal finances, the more
they adopt responsible financial behaviour (Xiao et al. 2011). In addition, students who feel in
control of their credit card use are less likely to use it (Kennedy 2013). One study, however,
reports a contrary result among Indonesian university students (Sari & Rofaida, 2012).
Therefore, the fourth hypothesis is the following:
H4: Among university students, self-efficacy in the use of consumer credit is positively
associated with the intention to adopt a responsible credit behaviour.
In the TPB model, there is a direct link between the level of self-efficacy and the performance
of the expected behaviour. Shim et al. (2010) found a positive link between high perceived
control and responsible personal financial behaviour. However, this link is not significant when
perceived control is related to debt (Kennedy 2013) or to overspending on a credit card
(Sotiropoulos and D’Astous 2013). Thus, it is possible to put forward the following hypothesis:
H5: Among university students, self-efficacy in the use of consumer credit is negatively
associated with the adoption of responsible credit behaviour.
Intention to Adopt Responsible Credit Practices
The Theory of Planned Behaviour assumes that intention is the best predictor of behavioural
adoption. Thus, the model used in this study indicates that the intention to adopt responsible
consumer credit behaviour could predict whether or not risky consumer credit behaviour will
be adopted. In addition, Xiao et al. (2011) found that the intention to adopt three responsible
credit behaviours is negatively and strongly associated with the adoption of risky credit card
payment behaviour and moderately associated with the adoption of risky borrowing behaviour.
It is therefore logical to formulate the following hypothesis:
H6: Among university students, intention to adopt responsible consumer credit behaviours
is negatively associated with the adoption of responsible credit behaviour.
Consumer Debt
The consumer debt variable was added to the TPB model. Consumer credit products include
amounts due to different creditors and for different purposes (vehicles, furniture and household
appliances, credit card balances, money borrowed from banks, parents and relatives) and do
not include student loans and mortgage loans. In fact, students who engage in risky credit
behaviour have higher levels of debt (Xiao et al. 2011).
H7: Among university students, adoption of responsible credit behaviour is positively
associated with consumer debt levels.
Invariance between Undergraduate and (Post)Graduate Students
Finally, it appears that data on graduate and postgraduate students and their use of consumer
credit have so far been non-existent. However, since the socio-demographic characteristics are
different for each group, it is possible that this influences the relationships between the various
variables. Thus, the following research question is proposed: Does the strength of the
relationship between variables is different across populations?
Table 2. Descriptive statistics of the sample
Variables undergraduates (n = 1006) graduates and postgraduates (n = 317)
n % n %
Gender
Female 775 77.0 206 65.0
Male 220 21.9 105 33.1
No answer 11 1.1 6 1.9
Age
20 years or younger 202 20.1 8 2.5
21 to 25 years old 456 45.3 115 36.3
26 to 30 years old 177 17.6 89 28.1
31 to 35 years old 82 8.2 52 16.4
36 to 40 years old 52 5.2 31 9.8
41 years or older 37 3.7 22 6.9
Nationality
Canadian 945 93.9 297 93.7
Other 54 5.4 20 6.3
No answer 7 0.7 0 0.0
Current living situation
Living alone 150 14.9 72 22.7
Living with parents 246 24.5 32 10.1
Living with roommate(s) 199 19.8 36 11.5
Living with partner 400 39.8 173 54.6
No answer 11 1.1 0 0.0
Respondent’s university
UQTR 567 56.4 217 68.5
Laval University 439 43.6 100 31.5
Student status
Full-time student 749 74.5 231 72.9
Part-time student 207 20.6 69 21.8
Full-time and part-time student 12 1.2 4 1.3
No answer 38 3.8 13 4.1
Education program
Administrative Sciences 185 0.18 57 0.18
Educational Sciences 122 0.12 46 0.15
Social Sciences 102 0.10 54 0.17
Health Sciences 76 0.08 78 0.25
Nursing sciences 74 0.07 14 0.04
Humanities and Social Sciences 59 0.06 27 0.09
Science and Engineering 39 0.04 13 0.04
Agriculture and Food Sciences 17 0.02 7 0.02
Architecture, Art and Design 11 0.01 3 0.01
Multidisciplinary 7 0.01 0 0.00
Forestry and Geomatics 4 0.00 10 0.03
Law 3 0.00 1 0.00
No answer 307 0.31 7 0.02
Method
Respondents
Study respondents (n = 1,323) were undergraduate, graduate, and postgraduate students from
two universities in the province of Quebec, Canada. These universities differ in size, number of
students attending and location, which could result in a greater diversity of respondents and
increase the representativity of the sample. Table 2 shows the descriptive statistics comparing
undergraduate with graduate and postgraduate students (masters and PhDs).
Data Collection
E-mails were sent to all students (all programs, all degrees) using their university e-mail
address, inviting them to participate in the study (response rate: Laval University = 1.1%;
UQTR = 6.3%). Students were asked to click on an Internet link to complete an online
questionnaire. Most of the respondents were enrolled in administration, education, social
and health sciences. Respondents received no incentives and the study was subject to
appropriate ethical scrutiny by both universities. The questionnaire took approximately 17 mi-
nutes to complete.
Measures
The questionnaire contained scales measuring the TPB’s five specific consumer credit con-
structs. With the exception of adoption of risky credit behaviour, all scales were composed of
multiple items and all items had a 5-point (1 = strongly disagree; 5 = strongly agree) or 7-point
(1 = strongly disagree; 7 = strongly agree) Likert-type response format. Psychometric proper-
ties were calculated for all scales. It was decided to use the same response scale as that used in
the studies from which the items were derived. Regarding self-efficacy, the two studies found
used different Likert scales, one with seven points (Sotiropoulos and D’Astous 2013) and the
other with five points (Kennedy 2013). In order to maintain the respondent’s attention and
avoid automatic response without internalizing the question (Krosnick and Presser 2010), it
was decided to use the seven-point scale rather than the five-point scale. Indeed, the five-point
scale is used for four of the six constructs (i.e., attitude, descriptive social norms, intention and
risky credit behaviours). To ensure that the respondent noticed this change in scale, a notice
appeared at the beginning of a new set of questions.
Some researchers have proposed different ways to measure attitude (Chudry et al. 2011;
Hayhoe et al. 2005; Kennedy and Wated 2011; Rutherford and DeVaney 2009; Sari Rofaida
2012; Xiao et al. 2011; Xiao et al. 1995). Based on these instruments, the items were
developed to meet the definition of attitude as presented by Fishbein and Ajzen (2010).
According to these authors, the measurement of attitude is evaluative in nature and the content
of the items presented this nature. The attitude scale was initially composed of 15 items.
Respondents were asked to indicate the extent to which they agreed or disagreed with
statements on how they felt about and evaluate debt and credit. An exploratory factorial
analysis was conducted, and 2 subscales were found: pro-credit and anti-credit attitude. Such a
division of factors had been found by Davies and Lea (1995). One of the five items in the pro-
credit scale was: I am proud to own a credit card”. A high score indicates a favourable feeling
toward the use of credit. One of the eight items in the anti-credit scale was: “Borrowing is very
often problematic”. A high score indicates an unfavorable feeling toward the use of credit. The
removal of two items: I like that there is solicitation from companies offering financial
services” and “I find it absolutely useless to have a credit card” led to a Cronbach’s alpha
of 0.74 for the pro-credit subscale and 0.77 for the anti-credit subscale.
Structural equation modeling was used to verify the factorial structure of the scale.1 Each
dimension was tested individually and lead to satisfactory fit indexes: Pro-consumer credit
attitude (CFI = .98, TLI = .97, SRMR = .02) and Anti-consumer credit attitude (CFI = .94,
TLI = .92, SRMR = .04).
Social Norms toward Consumer Credit
There are two types of social norms: injunctive and descriptive. In the questionnaire, the
section on social norms was divided according to the reference person (parents and friends)
and then according to the type of norm.
Injunctive norms: Chudry et al. (2011) initially proposed a scale measuring subjective
norms toward borrowing. The scale, inspired by Chudry et al. (2011), was composed of five
items measuring injunctive norms on consumer credit. The respondents were asked to indicate
the extent to which they agreed or disagreed with statements on perceived pressure regarding
the appropriate use of credit. One of the items in this scale was: My parents/friends think it is
important to use credit responsibly”. A high score indicates that the respondent perceives
pressure from the reference person. The following item was removed: In my opinion, my
parents/friends would approve the way I use credit”. This brought the internal consistency to
0.65 for parents and to 0.68 for friends.
Structural equation modeling was used to verify the factorial structure of the scale. The
unidimensional model was tested for parents and for friends. The model for friends led to
satisfactory fit indexes without optimization (CFI = .99, TLI = .97, SRMR = .01). The model
for friends led to satisfactory fit indexes without optimization (CFI = .99, TLI = .98,
SRMR = .01).
Descriptive norms: The scale was composed of seven items and was inspired by the scale
developed by Kennedy (2013). Respondents were asked to indicate the extent to which they
agreed or disagreed with statements regarding the perception that the reference person uses
credit appropriately. The following item was in this section: I think my parents/friends do not
have credit problems”. A high score indicates that the respondent perceives that his/her
parents/friends use consumer credit responsibly. Two items were removed from both the
parents and friends scale: I think my parents/friends use credit only when they do not have
cash” and I think my parents/friends have more than two credit cards”. This modification
resulted in a satisfactory Cronbach’s alpha of 0.92 for parents and 0.91 for friends.
Structural equation modeling was used to verify the factor structure of the scale. The
unidimensional model was tested for family and friends. Both models provided satisfactory fit
indexes without optimization (Parents: CFI = .99, TLI = .98, SRMR = .01; Friends: CFI = .99,
TLI = .99, SRMR = .01).
Motivation to comply: Added to social norms are two items that measured motivation to
comply: one for parents and one for friends. Respondents were asked to indicate the extent to
which they agreed or disagreed with statements regarding the importance given to the
reference person’s expectations of them. The following item is an example: “My friends’
opinion of debt and credit is important to me””. A high score indicates that the person is
motivated to comply with the reference person’s expectations. Following the indications of
Fishbein and Ajzen (2010), the influence of injunctive norms was weighted by the motivation
1
Software used: R.
to comply. To do this, each item of the injunctive norms was multiplied by the score of the
motivation to comply item of the right reference person.
Self-Efficacy toward the Use of Credit
This scale, inspired by Kennedy (2013) and Sotiropoulos and D’Astous (2013), contained a
total of 11 items. Respondents were asked to indicate the extent to which they agreed or
disagreed with statements about how they perceived their own ability to use the credit
appropriately. The scale contained items such as: For the moment, I think I can pay my loans
each month”. A high score indicates that the respondent believes that he or she is capable of
using consumer credit responsibly. Two items were removed “For the moment, I think I
can decide to put money aside rather than use the credit” and “For the moment, I think I
can control the number of credit cards I own” and the Cronbach’s alpha value was 0.86.
Structural equation modeling was used to verify the factorial structure of the unidimen-
sional model scale. The model was optimized by adding one link between error terms.
Examination of the items linked by their error terms suggested that a systematic measurement
error could occur. The common link between these items is the use of the word debt, which is
not found in the other items. Thus, it is possible that the measurement error associated with the
term debt induced a bias in the responses of these two items (r = 0.62). This change resulted in
a statistically significant improvement in the model (CFI = .97, TLI = .96, SRMR = .03).
Intention to Adopt Responsible Credit Behaviour
This scale, inspired by Roberts and Jones (2001), was initially composed of 13 items.
However, due to a computer problem, only items 1 to 6 received a response from students
at one of the two universities. The implications on the validity of the content due to the loss of
these items will be further discussed in a later section of this article. Respondents were asked to
indicate the extent to which they agreed or disagreed with statements regarding their intention
to adopt consumer credit behaviours over the next 12 months. The following item was one of
the six items: Over the next 12 months, I intend to avoid reaching my card’s credit limit”. A
high score indicates that the person intends to adopt most responsible credit behaviours. One of
the six items was removed: Over the next 12 months, I intend to use my credit card only when
I cannot pay with cash”. With this item removed, the internal consistency increased to 0.69.
Structural equation modeling was used to verify the factorial structure of the scale. The
unidimensional model provided satisfactory fit indexes without optimization (CFI = .97, TLI =
.93, SRMR = .04).
Risky Credit Behaviour
This scale, which measured the adoption of risky credit behaviour, was initially composed of
six items. All items had a 5-point (1 = never; 5 = very often) Likert-type response format.
Respondents were asked how often they had performed credit behaviours in the past
12 months. The following is an example of an item: In the last 12 months, regarding only
my personal loans and credit cards, I’ve been late in making payments”. A high score
indicates that the person has often adopted risky credit behaviours. After analyzing the items,
one item was removed: In the last 12 months, [...] I have owned more than one credit card”.
By removing this item, the internal consistency was 0.74. Structural equation modeling was
used to verify the factorial structure of the scale. The unidimensional model provided
satisfactory fit indexes without optimization (CFI = .97, TLI = .93, SRMR = .03).
Socio-Demographics Variables
In addition to the measures described above, socio-demographic variables were used to create a
profile of the respondents and to compare with the data of the target population. Each respondent
reported: their gender, age, nationality, current living situation, student status and study program,
income, number of credit cards, expectations of a change in income the following year, their
employment status, the fact of living certain unexpected situations that could influence their
income, and finally, their consumer debt. This last variable is an addition to the TPB model.
Results
Mean Differences between Cycles
Prior to testing the hypotheses, the data were cleaned, and distributions were examined for
skewness or kurtosis and any other possible distorting conditions that may have violated the
assumptions of general linear model analyses. A total of 182 respondents did not answer to
more than half of the measuring scales and were therefore removed from the study. To ensure
that these respondents did not differ from the remaining respondents, their sociodemographic
characteristics were compared using the Mann-Whitney test. Only one variable was statisti-
cally different: nationality (U = 143,248, p ≤ 0.05). Nine respondents were outliers on one or
more variables (extreme scores on measuring scales or on sociodemographic variables), so
they were also eliminated. Finally, it appears that only two variables were normally distributed:
friends’ subjective norms (injunctive and descriptive).
Mean scores for seven scales (subjective norms (injunctive and descriptive) for parents and
friends multiplied with motivation to comply, self-efficacy, intention, and risky consumer credit
behaviour) were compared across undergraduate and graduate students. Results from t-test
revealed no significant mean differences for three variables: parental descriptive norms
(t(524.51) = −1.49, p = 0.14), self-efficacy (t(1314) = −0.34, p = 0.41), and intention (t(1305) =
−0.80, p = 0.97). The means revealed that students think their parents adopt responsible con-
sumer credit behaviours (values of 17.65 and 16.73, respectively, on the 35-point scale), they feel
they are able to use consumer credit responsibly (values of 6.35 and 6.33, respectively, on the 7-
point scale), and they have the intention to adopt responsible consumer credit behaviour in the
next 12 months (values of 4.67 and 4.64, respectively, on the 5-point scale).
Results of the t-test revealed statistically significant mean differences for four variables:
parental injunctive norms (t(528.77) = 2.59, p ≤ 0.05), injunctive norms of friends (t(1320) =
−3.27, p ≤ 0.05), descriptive norms of friends (t(1320) = −2.06, p ≤ 0.05), and risky consumer
credit behaviour (t(1321) = −1.69, p ≤ 0.05). The means revealed that undergraduate students
feel more pressure from their parents (values of 23.55 and 21.40, respectively, on the 49-point
scale) to use consumer credit appropriately, than do graduate students. With regard to the
feeling of pressure from friends to use consumer credit properly, undergraduate students
neither agree nor disagree with this feeling, while graduate students do not agree (values of
11.82 and 9.88, respectively, on the 49-point scale). Undergraduate students are more likely to
think that their friends do not adopt responsible consumer credit behaviours, than do graduate
Fig. 2 Optimized model for undergraduate students (*: Statistically significant parameters at p ≤ 0.05).
students (values of 9.00 and 8.14, respectively, on the 35-point scale). Finally, although both
groups of students have never or rarely adopted risky credit behaviours in the past 12 months,
the means revealed that undergraduate students are more likely to adopt these behaviours than
graduate students (values of 1.65 and 1.58, respectively, on the 5-point scale).
Model Invariance According to the Cycle
First, a complete measurement model including all student levels was analyzed with the
software R. The model fit was adequate, CFI = .92, TLI = .92, SRMR = .05. In order to verify
if the TPB model is invariant across university cycles, the method proposed by the developers
Fig. 3 Optimized model for (post)graduate students (*: Statistically significant parameters at p ≤ 0.05).
of the R software was used. This method includes five steps: (1) optimizing the TPB model in
each sample (undergraduates compared to (post)graduates); (2) verification of configural invari-
ance; (3) verification of weak invariance; (4) verification of strong invariance and (5) verification
of strict invariance. In Steps 3, 4 and 5, all shared parameters and correlations between both
samples are equality constrained. Significant results to LMtest of equality constraints indicates that
there is no invariance, i.e., parameters or correlations differ across samples.
Figures 2 and 3 show the optimized models for each sample: undergraduate and
(post)graduate students. The model fit for undergraduate students was adequate, CFI = .92,
TLI = .92, SRMR = .05. The model fit for (post)graduate students was adequate, CFI = .91,
TLI = .90, SRMR = .06. The final results of the invariance indicate that three relationships differ
significantly between the two samples: self-efficacy toward the use of credit – adoption of
risky credit behaviours, intention to adopt responsible credit behaviour – adoption of risky
credit behaviours, adoption of risky credit behaviours – consumer debt.
Discussion
Indebtedness remains a problem among young adult students. Consumer credit debt has
consequences such as increased financial stress (Nelson et al. 2008; Tran et al. 2018) and
the decision not to pursue higher education (Lusardi et al. 2010). The use of the TPB model
was effective in explaining students’ behaviour with their credit card, but not with consumer
credit as a whole (Chudry et al. 2011; Sotiropoulos and D’Astous, 2013; Xiao et al. 2012).
Moreover, this problem has not been studied among (post)graduate students. The present study
provides new knowledge on consumer credit and (post)graduate students.
In summary, parental presence and consumer credit self-efficacy can contribute to the
intention to adopt responsible credit practices. On the other hand, anti-consumer credit attitude
can reduce this intention. Contrary to what was expected, friends have no influence. In
addition, intending to adopt responsible consumer credit practices may reduce the likelihood
of adopting risky credit behaviour, but the link between these two variables is weak, especially
for undergraduate students. People who have confidence in their consumer credit management
skills are more likely to want to act responsibly with their credit.
When compared, undergraduate students present some differences with (post)graduate
students. Regarding their sociodemographic characteristics, the undergraduate student sample
is composed of a larger number of women, people living with their parents and people living in
a partnership. In addition, their annual income is lower, and they are less likely to think that
their income will increase in the coming year than (post)graduate students. During the summer
semester, they were fewer unemployed and more in full-time employment. Undergraduate
students say they are more likely to feel and be influenced by pressure from family and friends
to act responsibly with their credit. In addition, they reported being more motivated to comply
with their friends’ expectations than (post)graduate students. Finally, they are more likely to
engage in risky consumer credit behaviour than (post)graduate students.
When comparing the TPB model according to the level of education of the students, some
differences appear. First, unlike (post)graduate students, undergraduate students are influenced
by their parents. Second, the level of self-efficacy of consumer credit does not influence the
intention to engage in responsible consumer credit behaviour among (post)graduate students.
Finally, the likelihood of engaging in risky consumer credit behaviour is further influenced by
the intention to use consumer credit responsibly among (post)graduate students.
Contrary to what was expected, a pro-credit attitude has no influence on the intention to adopt
responsible credit behaviour while anti-credit attitude do have an influence. Previous studies
have found that undergraduate students who have a positive attitude toward the use of a credit
card do intend to use the card (Kennedy 2013; Sari and Rofaida 2012). This is different from
what was obtained from the undergraduate and (post)graduate students in this study. It should be
noted that in our case we characterize the way the credit is used, i.e. responsibly, whereas in these
studies, it is mentioned ‘use’, without knowing whether it is done in a responsible way or not.
The fact that the pro-credit dimension is not statistically significant can be explained by the
wording of the questions forming this dimension. Indeed, statements such as “I love using my
credit card” or “Owning a credit card can contribute to happiness” do not reflect a positive
attitude toward responsible behaviour. To obtain a significant relationship between attitude and
intention, it is suggested that the measured attitude be specifically related to intention (Fishbein
and Ajzen 2010). In this case, the notion of responsible behaviour is not taken into consider-
ation in the items measuring pro-credit attitude.
Students who are against the use of credit do not intend to use it responsibly. Maybe that
those who have had a negative experience make them averse toward credits, what does not
make them want to try to use it well. This dimension of experiences with credit and how it may
have affected both attitude and behaviour is an interesting avenue to study this relationship
with responsible credit behaviour.
Parent’s Role
For undergraduate students, the results indicate that perceived parental pressure increases the
intention to adopt responsible consumer credit behaviour, but that undergraduate students are
not likely to imitate them. In fact, when they observe their parents engaging in responsible
consumer credit behaviour, they are less likely to intend to adopt this type of behaviour.
However, since the latter result is not statistically significant, caution should be exercised.
In the literature, studies using the TPB have found that parents play a significant role in the
likelihood of engaging in responsible personal finance behaviour (Shim et al. 2010; Xiao et al.
2011) and the intention to borrow less (Chudry et al. 2011). Moreover, when they observed their
parents arguing about money or engaging in risky credit behaviour, undergraduates were more
indebted (Hancock et al. 2012) and were more likely to engage in risky credit behaviour (Jackson
2010; Moore 2004). Thus, parents, by modeling, can influence their children’s unwanted
behaviour. In this study, even if students observe responsible practices among their parents, this
does not lead them to imitate them and to do the same, since undergraduate students who reported
having observed good practices among their parents are still less disposed to adopt responsible
practices. Perceived pressure or even teaching their children can help them engage in responsible
consumer credit practices much more than just being role models.
Friend’s Role
Neither perceived pressure nor the observation of responsible consumer credit practices from
friends influences the intention to adopt responsible consumer credit behaviour. It is not
uncommon to observe an insignificant link between subjective norms and credit related
intentions or behaviours. For example, some studies with a sample of undergraduate students
did not find a statistically significant result between subjective norms concerning friends
(Kennedy 2013; Xiao et al. 2011) or relatives (Serido et al. 2015; Shim et al. 2010) and the
behaviour under study. As we know, only one study reported statistically significant results
between descriptive norms and friends. Sotiropoulos and D’Astous (2013) found that when
they saw their friends overspend on their credit card, undergraduate students were more likely
to do so. In studies that have measured subjective norms, many methods were used to measure
them. Few studies measure both injunctive and descriptive norms simultaneously while in this
study, both norms were measured.
Self-Efficacy toward the Use of Credit
In the present study, a high level of self-efficacy toward the use of consumer credit increases
the intention to adopt responsible consumer credit behaviour and reduces the likelihood of
adopting risky consumer credit behaviour. In the literature, different results have been obtained
regarding the influence of perceived control on personal finances. Among undergraduate
students, high perceived control is associated with the intention to adopt responsible financial
practices (Shim et al. 2010; Xiao et al. 2011) and a reduction in excessive credit card spending
(Kennedy 2013; Sotiropoulos and D’Astous 2013). Kennedy (2013) found no statistically
significant results between perceived control and debt level.
It is important to note that perceived control is measured differently in each study. Some of
previous researchers have used the concept of financial controllability and efficacy (Xiao et al.
2011) or a homemade measure of perceived control (Kennedy 2013; Shim et al. 2010). Since
in this study the strength of the relationship between consumer credit self-efficacy and
intention or behaviour is strong, it appears that the scale measures more precisely consumer
credit self-efficacy. The consumer credit self-efficacy scale used in this study is composed of
nine items, unlike previous scales using less than five items (Chudry et al. 2011; Sari and
Rofaida 2012; Shim et al. 2010; Xiao et al. 2011). A larger number of items in a measurement
instrument can allow for more accurate measurement because it contains a larger number of
practices related to the construct of interest (DeVellis 2012, 2017). This is the case for the
instrument measuring self-efficacy in this article. Each item represents a responsible practice
for which the respondent must judge whether he or she is capable of performing it.
Aiming to improve psychological factors, such as self-efficacy or self-confidence, to the
extent that subjective knowledge can be considered as an indicator of self-confidence, is more
effective than relying solely on knowledge, a cognitive factor. In other words, the perception of
having knowledge or the perception of being able seems to have a significant influence on the
adoption of responsible financial behaviour. It is reassuring to note that this self-confidence is
not conducted with excessive confidence that could lead students to be unaware of their
behaviour. We must be careful because in the sample of (post)graduate students, self-efficacy
does not influence engagement in risky consumer credit behaviour. It is therefore important to
explore the factors that prevent these students from adopting financial behaviours that have an
impact on their financial health.
Intention to Adopt Responsible Credit Behaviour
In the few studies that have measured the link between intention and credit behaviour, it
appears that having intention translates into engaging in the studied behaviour (Sari and
Rofaida 2012; Xiao et al. 2011). For example, Xiao and his colleagues (Xiao et al. 2011)
found that undergraduate students intending to respect a budget, set aside money and
reimburse the amount due on the credit card in full each month did actually engage in
these behaviours. In this study, the intention to adopt responsible credit behaviour was
used to predict the adoption of risky credit behaviour. It should be acknowledged that it
is possible that the determinants explaining (the intention) to adopt responsible credit
behaviour may be different from the determinants explaining the adoption of risky credit
behaviour. Nevertheless, it is interesting to note that people who intend to act responsibly
are less likely to act in a risky way.
Among researchers who use the TPB to study credit behaviours, few use intention to
predict behaviours (Serido et al. 2015; Shim et al. 2010; Sotiropoulos and D’Astous
2013). Other researchers use intention as a proxy to measure behaviour, but they do not
measure the behaviour (Chudry et al. 2011; Erdem 2008). In this study, intent and
behaviour were measured. A critique could be made regarding the fact that the amount
of debt is reported by the respondent rather than by collecting the actual data. However,
given the laws on bank data confidentiality, it would be difficult to obtain the actual
amount of consumer debt for each respondent. In this regard, measures were implement-
ed to motivate respondents to report actual information, such as reassuring them that the
questionnaire is confidential and anonymous, giving them a clear definition of what is
being measured and asking this question at the very beginning of the questionnaire
(Fishbein and Ajzen 2010). Moreover, the scale used to measure intention provides a
more accurate measure than a simple item, unlike the measure used by Sari and Rofaida
(2012). In this study, intention was measured using five items specifically related to
consumer credit practices and not personal financial practices (Xiao et al. 2011).
Risky Credit Behaviour
Of the studies that used the TPB to explain credit behaviour, only one verified the link
between credit behaviour and debt. As expected, Xiao and his colleagues, using SEM,
found that undergraduate students who engage in risky credit behaviour and accumulate
debt by credit card are more indebted. Without the use of the TPB, two other studies
produced similar results. On the one hand, the risky use of a credit card may increase
undergraduate students credit card debt (Norvilitis and MacLean, 2010). On the other
hand, the adoption of responsible financial practices reduces the amount due on credit
cards among undergraduate students (Hayhoe et al. 2000). In this study, similar results
were obtained. Moreover, the value of the parameter is high, which confirms the
importance of the link between these two variables.
The focus of the study is not only on credit card use but rather on the use of consumer
credit. This is a theoretical contribution because, by including all credit products, it
provides a global view of credit usage since undergraduate students do not only use credit
cards. Moreover, the more credit products a person has, the more complicated payment
management becomes and greater are the risks of overindebtedness (Lachance et al. 2005).
Differences between Undergraduate and (Post)Graduate Students
When optimizing the TPB model for both samples (undergraduate and (post)graduate stu-
dents), differences were identified. First, the link between parental subjective norms and the
intention to engage in responsible consumer credit behaviour is statistically significant for
undergraduate students, but not for (post)graduate students. Second, the link between con-
sumer credit self-efficacy and risky consumer credit behaviour is statistically significant for
undergraduate students, but not for (post)graduate students. Finally, according to the invari-
ance results, it appears that two significant parameters vary from one sample to another. It is
not possible to compare the results obtained using a TPB model for (post)graduate students
because there is no literature, as we know, on the use of consumer credit for (post)graduates.
These differences can be explained by differences observed in sociodemographic charac-
teristics. Among these variables, annual income is one that has a significant influence on
personal financial behaviour. For example, in a study of young adults in Quebec (Canada),
researchers found that annual income influences credit knowledge, attitudes toward consumer
credit and consumer debt (Lachance et al. 2005; Lachance et al. 2006). In addition,
(post)graduate students’ expectations of their future income are more optimistic than those
of their counterparts. Although these expectations do not encourage undergraduate students to
engage in risky consumer credit behaviour (Robb and Sharpe 2009), the situation may be
different for (post)graduate students. What can be assumed is that undergraduate and
(post)graduate students have different characteristics in the use of consumer credit. It is
therefore important to study each group separately.
Conclusion
This study provides some answers regarding the use of consumer credit as a whole and not
solely the use of consumer credit. It also provides information on an unstudied population:
(post)graduate students. It is compelling to examine the differences between undergraduate
and (post)graduate students. The most obvious result is that parents no longer influence
(post)graduate students, but still influence undergraduate students. Yet, in a study conducted
among young Quebec adults aged 18 to 29 years old (students and non-students), parents are
reported as the main source of personal finance learning by the majority of the respondents
(Lachance et al. 2005). Although this study dates back a few years before this present study, it
nonetheless raises questions about the real influence that can be exerted by a source identified
as the main one.
Moreover, even with a high level of self-efficacy toward credit use, (post)graduate students
do not intend to adopt responsible consumer credit behaviour. Many sociodemographic
variables can influence intention, such as having children, attending school, having a profes-
sional job or being married to a person with a high annual income. Currently, it can be
concluded that we cannot help students in debt solely based on their student status or age, but
also based on their living situation. For example, it is not uncommon for young people at this
age to have children, which significantly changes the management of personal finances.
We must acknowledge as a limitation of our study the low response rate (6.3% and 1.1%).
When a survey is conducted via the Internet, the response rate is often lower than that of
telephone or paper surveys (Fricker et al. 2005; Healey et al. 2005). In addition, convenience
sampling does not control sampling error or evaluate parameter estimation error (Laveault and
Grégoire, 2014). On the other hand, the number of respondents is high and many of the
characteristics of the sample are similar to those of the Quebec student population. According
to the most recent data available from the Ministère de l’Enseignement supérieur, de la
Recherche et de la Science (Ministry of Higher Education, Research and Science; MERS
2015), the characteristics of the sample collected in this thesis do not differ from the university
student population in Quebec on the following elements: age, gender, income, debt and life
situation. Therefore, it is reasonable to believe that the results obtained in this study would be
generalizable to the student population. Some researchers point out that it is more important to
have a representative sample of the population than a high response rate (Asch et al. 1997;
Cook et al. 2000; Fincham 2008). However, to ensure this, further studies must be carried out
on this particular population.
In order to compare the results of this study with previous ones, it was decided to use
the Likert scale with five or seven points. As a result of this decision, many respondents
used the mid-point to answer the items. Scales measuring subjective norms (family and
friends) met this issue. As a result, the statistical variance decreased so that parameter
estimates could be affected. For future studies, it would be recommended to use the
Likert scale with no mid-point (four or six points) and add the option: do not know or
does not apply.
The scale measuring the intention to engage in responsible consumer credit behaviour lost
nearly half of its items due to a computer problem on one of the two campuses. This loss may
have resulted in a decrease in the content validity of the scale. In addition, a link between the
error terms was added during the validation process using the SEM (self-efficacy toward the
use of consumer credit). These two situations highlight the fact that systematic measurement
errors can influence the validity of some inferences made with these scales. On the other hand,
validity verification is a process that could be done in many ways (Downing 2003; Downing
and Haladyna 1997; Messick 1995). Following the steps suggested by DeVellis (2012, 2017),
validity was verified from different angles. First, experts and members of the population were
consulted to verify the content validity. Also, a review of the literature in the field of credit
made it possible to obtain a representativeness of the items in relation to the field. Moreover,
the link with other variables was first verified using correlations. According to Downing
(2003), another way to verify validity is to calculate the link that two variables are supposed to
have in the study population. Finally, the analysis of the internal structure of the different
constructs included item analysis data such as the item-total correlation and the score scale
reliability. All these steps led to good results.
Implications
Previous studies, as well as this one, demonstrate the importance that parents have for
personal financial education among undergraduate students. By providing information,
parents could ensure that their child makes responsible use of consumer credit. In this
study, about a quarter of the undergraduate students still live with their parents. This
means that in a short time they will be on their own. Parents must take advantage of this
time with their child at home to teach him or her how to use consumer credit responsibly.
At this stage, unlike adolescents, for example, they are able to understand financial
issues such as credit ratings and bankruptcy.
Without a doubt, consumer credit self-efficacy is an important factor in improving
financial health, at least in using credit products responsibly. It is therefore important to
ensure that educational programs include activities that could help to increase the sense of
self-efficacy. As Bandura (1977, 1982, 1993) has demonstrated, the best way to improve
self-efficacy is to have experience in the field in question. In the province of Quebec, the
Ministère de l’Éducation, du Loisir et du Sport (MELS 2016) has made financial education
courses in secondary schools mandatory. To date, it is not known whether the program
includes activities to improve financial self-efficacy. It is essential that this ministry and
other educational organizations strive not only to educate young people, but to ensure that
they experience personal financial situations. It should be noted that the level of knowl-
edge can positively influence financial self-efficacy (Xiao et al. 2011) and financial
practices (Shim et al. 2010), but it is the subjective level of knowledge and not the
objective level. That is, the level of knowledge that a person believes they have increased
their self-efficacy, while the actual level of knowledge does not influence either self-
efficacy (Xiao et al. 2011) or financial practices (Shim et al. 2010).
For organizations that aim to help students with their personal finances, such as special
university departments that meet with students regarding their financial situation, the influence
of friends must be known. Some people may not be aware of the influence exerted by people
close to them. The people who meet the students could help to raise awareness of this harmful
influence leading to a situation of debt.
Intending to adopt responsible financial practices reduces the propensity to adopt
unsound behaviours. For the personal finance advisor, does this mean that when a client
says he intends to reimburse his loan, he must believe it without any guarantee? It’s not
that simple. When using the TPB model, to obtain a statistically significant result
between intention and behaviour, the measurement should be as accurate as possible.
This accuracy depends on four characteristics: the behaviour, the object of intention, the
situation and the moment when the behaviour occurs (Fishbein and Ajzen 1975). For
example, intending to repay the amount due on the credit card is less specific than
intending to repay the total amount due each month starting the following month. For
personal finance advisors who want to help their clients engage in responsible credit use,
an effective way is to get them to adopt a specific behaviour. As Miller and Rollnick
(2013) have demonstrated, when people engage in a particular behaviour at a given
moment, they are more likely to do so. This type of coaching may help clients correct
their financial situation, as well as help financial institutions to have more competent
customers.
Not only organizations that educate young adults about personal finances, but also financial
institutions such as banks have a role to play. These institutions must ensure strict regulations
on the granting of loans to university students who do not have regular employment. Knowing
that there is a huge amount of data stored in computers, large data analyses may be a good way
to avoid giving loans to people who cannot reimburse. Financial institutions benefit from
having competent clients who are able to repay their loans and set money aside. It is expensive
for them to pursue people who do not pay them back.
From a macroeconomic point of view, an additional effort could be made by government
authorities to protect consumers from the marketing practices of certain financial institutions.
In Quebec (Canada), the Consumer Protection Act tightened the regulations for credit card
repayment by increasing the percentage of the minimum amount due on the due date. This will
have the impact of reducing the total amount reimbursed by the consumer. However, the
regulations could be made more restrictive regarding solicitation. Some laws already exist in
this respect. For example, it is prohibited to send a card if no written request has been made by
the consumer or, in a credit advertisement, it is prohibited to encourage a consumer to purchase
a good or service by means of credit (Legis Quebec 2019). However, there is no legislation that
explicitly prohibits the offer of credit card memberships or an increase of the credit limit. A
new credit card or an increased credit limit should not become an option for a person with debt
problems, and that is what these solicitations allow.
Future Research
For the theoretical contribution, it is interesting to add another variable to the TPB model. It is
important to measure the influence of psychological and sociological variables on behaviour
through intention. But since debt is the logical consequence of risky credit use, this variable is
essential. Knowing that students consider it common to be in debt (Chudry et al. 2011), it
becomes more essential to explore the factors that contribute to changing their credit use.
Additionally, it must be noted that (post)graduate students present some differences concerning
personal finances. For social organizations that want to educate these people, it seems that
neither parents nor friends can help reach or influence (post)graduate students to engage in
responsible consumer credit behaviour. As Serido and her colleagues have studied, romantic
partners seem to play an important role in the personal financial decisions of undergraduate
students. It would be interesting to study whether the same influence occurs among
(post)graduate students.
A phenomenon observed among indebted undergraduate students is the return to the
parental home (Dettling and Hsu 2017). Are parents taking this opportunity to teach their
children about financial matters? Parents are known to play a crucial role in the personal
financial skills of undergraduate students (Grohmann et al. 2015). But are there any differences
between students who have lived in their parents’ homes for some time and those who return
because of their debts? Perhaps parents are more concerned when their children come home
because of indebtedness? It would be of interest to study whether the level of parental
involvement in personal finance education is different when their children are still at home
or when they return.
It is essential to consider both types of norms (injunctive and descriptive) because they can
influence in different ways, as was observed for the parents’ results. Again, differences were
observed between undergraduate and (post)graduate students. Although the TPB results show
that no type of subjective norms influences the intention to engage in responsible consumer
credit behaviour, it appears that undergraduates are more likely to comply with their friends’
expectations than (post)graduate students.2 Studies on the influence of friends on credit use are
still uncommon and there is a need to explore this research avenue. As we get older, the place
friends occupy in students’ lives may change. Different life situations, such as being in a
relationship or having children, can lead to other priorities being set, which can affect friends’
influence when spending is done solely for oneself. Thus, future studies interested in assessing
the influence of friends could consider the frequency and context in which friends meet.
This study provides two contributions concerning knowledge on credit use. The first
involves new knowledge about a population rarely studied in the field of credit use:
(post)graduate students. The comparison between undergraduate and (post)graduate students
revealed that, although they both study at university, they constitute a different population.
Second, the definition of credit, that is, amounts owed to different creditors and for different
purposes (vehicles, furniture and household appliances, credit card balances, money borrowed
from banks, parents and relatives), is more inclusive and provides a more global portrait of
university student indebtment. However, this knowledge is a small part of explaining the debt
situation and researchers must continue their studies on this issue.
2
T-test revealed a statistically difference between the motivation to comply for undergraduate students compared
to (post)graduate students (t(1320) = −2.70, p ≤ 0.05).
Appendix
Attitude toward the use of consumer credit
Pro-credit (α = 0.74)
& Owning a credit card can contribute to happiness.

& I really like owning a credit card.
& I love the extra services offered by credit cards. For example: extended warranties on
purchases or travel insurance.
& I am very proud to own a credit card.
& I love using my credit card.
Anti-credit (α = 0.77)
& I hate all types of credit.

& Borrowing is very often problematic.
& If my loans totalled a large amount of money, I would feel very stressed.
& I am very concerned when a loved one uses their credit card too often.
& The thought of borrowing makes me sick.
& I would be upset if someone tried to convince me to make a loan when I wanted to pay cash.
& I’m fearful to apply for a loan.
& I am fearful when I use my credit card.
Subjective norms toward consumer credit
Parents – injunctive norms (α = 0.65)
& My parents put pressure on me to use credit appropriately.

& If I used credit appropriately, I know my parents would be proud of me.
& My parents think it’s important to use credit wisely.
& My parents encourage me to not have debts.
Parents – descriptive norms (α = 0.92)
& I think that my parents control the expenses they put on their credit cards.
& I think that my parents do not have any problems with credit.
& I think that my parents are not over-indebted.
& I think that my parents use credit in a responsible way.
& I think that my parents always pay off their loans.
Friends – injunctive norms (α = 0.68)
& My friends put pressure on me to use credit appropriately.

& If I used credit appropriately, I know my friends would be proud of me.
& My friends think it is important to use credit wisely.
& My friends encourage me to not have debts.
Friends – descriptive norms (α = 0.91)
& I think that my friends control the expenses they put on their credit cards.
& I think that my friends do not have any problems with credit.
& I think that my friends are not over-indebted.
& I think that my friends use credit in a responsible way.
& I think that my friends always pay off their loans.
Self-efficacy toward the use of credit (α = 0.86)
For the moment, I think I can:
& control the purchases I charge to my credit card.

& make the monthly payments on my loans.
& avoid reaching the limit authorized on my credit card.
& avoid withdrawing cash on my credit card (cash advance).
& apply for a loan only when I know I can make all the payments.
& avoid making only the minimum payment on my credit card.
& avoid having too much debt.
& control the total amount of my debts.
& systematically refuse all solicitations for new credit cards.
Intention to adopt responsible credit behaviour (α = 0.69)
Over the next 12 months, I intend to::
& avoid reaching the credit limit on my card.

& always pay off my credit card balance in full.
& ask for credit only when I am sure I can make all the payments.
& avoid making only the minimum payment on my credit card.
& pay attention to the price of what I buy even if I use credit to pay.
Risky credit behaviour (α = 0.74)
In the last 12 months, regarding only my personal loans and credit cards, I have:
& made late payments.

& partially repaid the balance due on my credit card.
& reached the credit limit I had been authorized.
& made a cash advance on a credit card.
& spent more because I was using a credit card, whereas if I had paid cash, I would not have
spent as much (in restaurants, stores, etc.)
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Journal of Consumer Policy (2020) 43:565–592

Consumer Credit Use of Undergraduate, Graduate

J. Cloutier 1 & A. Roy

Keywords Graduate/postgraduate students . Consumer debt . Theory of planned behaviour . Self-

Determinants of Debt Levels and Responsible Credit Behaviour

Conceptual Framework and Hypotheses

Attitude toward the Use of Consumer Credit

References Sample (size) (answer rate) Type of model Main findings

Intention to adopt responsible financial

References Sample (size) (answer rate) Type of model Main findings

(n.d.) Perception of control → intention to use

Subjective Norms Relating to the Use of Credit

Subjective norms represent a person’s perception of the social pressure to behave in a

Fig. 1 Hypothesis tested (1 to 7)

Perceived Behavioural Control toward the Use of Credit

Intention to Adopt Responsible Credit Practices

Invariance between Undergraduate and (Post)Graduate Students

Table 2. Descriptive statistics of the sample

Variables undergraduates (n = 1006) graduates and postgraduates (n = 317)

Attitude toward the Use of Consumer Credit

Social Norms toward Consumer Credit

Self-Efficacy toward the Use of Credit

Intention to Adopt Responsible Credit Behaviour

Risky Credit Behaviour

Mean Differences between Cycles

Model Invariance According to the Cycle

Attitude toward the Use of Consumer Credit

Self-Efficacy toward the Use of Credit

Intention to Adopt Responsible Credit Behaviour

Risky Credit Behaviour

Differences between Undergraduate and (Post)Graduate Students

Attitude toward the use of consumer credit

& Owning a credit card can contribute to happiness.

& I hate all types of credit.

Subjective norms toward consumer credit

Parents – injunctive norms (α = 0.65)

& My parents put pressure on me to use credit appropriately.

Parents – descriptive norms (α = 0.92)

Friends – injunctive norms (α = 0.68)

& My friends put pressure on me to use credit appropriately.

& My friends encourage me to not have debts.

Friends – descriptive norms (α = 0.91)

Self-efficacy toward the use of credit (α = 0.86)

For the moment, I think I can:

& control the purchases I charge to my credit card.

Intention to adopt responsible credit behaviour (α = 0.69)

Over the next 12 months, I intend to::

& avoid reaching the credit limit on my card.

Risky credit behaviour (α = 0.74)

& made late payments.

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