This study examined the link between overindulgence and buying impulsiveness and the link between buying impulsiveness and credit card misuse among undergraduate students from 2 Midwestern universities. Hierarchical multiple regression was used to examine these relationships. Overindulgence predicted buying impulsiveness when controlling for the effects of age, race, gender, public or private school, and whether or not the student was employed. Buying impulsiveness predicted credit card misuse while using the same control variables. Overindulgence was not found to predict credit card misuse.

Study investigates distal and proximal contextual influences of the American Indian culture that affect financial decisions and behaviors. Primary household financial managers were interviewed. Study was grounded in Deacon and Firebaugh’s Family Resource Management theory. Findings indicated that American Indians view many concepts differently than conventional disciplinary meanings. Most critical is that money is not the only currency used within the culture but relationships and nature are also used as other currencies. Further findings of note are (a) the cultural belief that resources must be shared with all family members is seen as an obligation and often creates major resource demands, (b) spirituality and nature are of major importance in resource decisions, and (c) the holistic, integrated view of health and well-being is essential to consider when working with American Indians on resource management. Three resource management patterns were discovered: mainstream, traditional, and hybrid. Expense and income worksheets were developed reflecting cultural nuances.

The purpose of this study was to examine the relationship between financial literacy and financial behaviors among various age groups. Financial literacy was measured in three ways: objective financial knowledge, subjective financial knowledge or confidence, and subjective financial management ability. The age groups were 18–24, 25–34, 35–44, 45–54, 55–64, and 65 and older. Long-term financial behavior referred to retirement saving and investing behavior, whereas short-term financial behavior referred to spending and emergency saving behavior. In the full sample, both objective and subjective financial literacy variables were positively associated with long- and short-term financial behaviors. In the age subsamples, subjective financial knowledge or confidence was more strongly related to long- and short-term financial behavior than either objective financial knowledge or subjective financial management ability in the younger age groups. In the older age groups, objective financial knowledge was more strongly related to long-term financial behavior than either of the other two measures of financial literacy.

The purpose of this study is to examine factors associated with households’ willingness to take financial risks, particularly the effect of households’ expectations. The data used in this study are the Survey of Consumer Finances 2007 by which researchers can examine the household financial issues before the financial crisis. By employing multinomial logit regression, the new finding of this study is that when the households expect that the future economy will be better, they are not willing to take either no or substantial financial risk. This study uses the uncertainty theory with the timing of the survey to interpret this seemingly unintuitive result. Other findings are that age, more working people in a household, male, education, and majority race are household characteristics positively affecting the probability of the household’s willingness to take average and above average financial risks.

We examine improvements in financial knowledge for 8th-grade participants in our financial fitness camp, part of our multifaceted financial literacy program. Eighty-three students enrolled in the camp, and 59 had individual development accounts (IDA). We address several issues raised in the literature by focusing on low-income, predominantly Hispanic students, varying the treatment intensity, comparing outcomes for students in our IDA program with those who are not, addressing the potential endogeneity of IDA participation, and testing for selection bias. Financial knowledge increased by approximately 12 percentage points from camp participation. Standardized Language Arts scores, rather than treatment intensity or IDA participation, most affected gains in financial knowledge. There was no evidence of selection bias. Parents with high “present bias” were less likely to enroll their students in the camp, implying that integrating financial literacy education in the regular school curriculum will better serve students in such families.

Low- and moderate-income tax filers often receive refund and tax credit checks that easily total a fifth or more of their total annual income. This study uses data collected in 2009 and 2010 from 79 clients of a volunteer income tax assistance (VITA) program to compare filers’ estimates of their returns before the tax preparation process with their returns calculated by trained VITA volunteers. Most filers (75%) underestimated their refunds, and 52% underestimated by $500 or more. Hence, at least some portion of the refund arrives as an unanticipated windfall. Counseling and planning work with low- and moderate-income families should take these significant lump sum income events into consideration.

We conducted an annual survey of undergraduate students taking finance courses over the past 5 years (2009–2014). Our results showed that although more than 70% of students considered the financial planning profession to some extent, the percentage of students who had seriously considered it declined over time, despite the increasing number of new hires in the area. Our regression models showed that students with a higher level of related experience were more likely to show increased interest over time and that male students were less likely to change their minds regarding their decisions to become a financial planner. These results suggest that academic programs need to form stronger partnerships with the industry and to facilitate better communications with female students regarding the profession.

The purpose of this study was to explore personality determinants of financial satisfaction using the Metatheoretic Model of Motivation and Personality (3M Model) as a theoretical framework. Such a framework can help researchers identify traits associated with financial satisfaction and ultimately assist practitioners working with clients on debt management and wealth building. The study used data from a survey of university alumni who had taken consumer economics and/or personal finance at the undergraduate level. Although the study’s initial, fully mediated model is fragmented, the modified model offers interesting insights into the determinants of financial satisfaction. The findings suggest that trait characteristics such as need for material resources and emotional instability affect financial satisfaction. Furthermore, the findings indicate that financial behaviors (compound traits) are related to financial situation (situational traits) and financial satisfaction (surface traits).

The objectives of this study were to evaluate the extent to which homeownership contributed to household financial strain as measured by loan delinquency after the onset of the recent housing market crash, and to examine if the impact of homeownership on household financial strain differed for Black and White households. Using data from the 2010 Survey of Consumer Finances, we found that, after controlling for other factors, a household's housing preferences had a potential effect on the likelihood of experiencing financial strain following the collapse of residential housing prices. In addition, Black homeowners were more likely to have experienced financial strain following the housing collapse than were White homeowners, regardless of the time period in which the home was purchased. The implications of the findings for public policy, personal financial planning and education, and further research are presented.

This study had two distinct purposes. First, to determine the predictors of financial stress among college students who sought free peer-based financial counseling from a large Midwestern university (N = 675). Secondly, to determine the effectiveness of the particular financial counseling center from a subsample of those who sought help (N = 97). Results of the regression analysis indicate that students more likely to experience financial stress include freshmen, those with low perceived mastery and net worth, and those with median student loan debt as compared to those with no student loan debt. Results of t-test analyses suggest that financial counseling had positive effects on subjective financial knowledge and financial attitudes and mixed effects on financial behaviors.

The purpose of this study was to examine factors associated with a composite measure of financial behaviors among soldiers. Using primary data from a sample of soldiers before deploying to a war zone, results suggest that past behaviors and some personal factors play a significant role in soldiers' financial behaviors. Personal factors, such as high levels of subjective financial knowledge, higher self-mastery, and lower levels of financial anxiety, all had positive effects on financial behaviors. Soldiers with any amount of credit card debt had worse financial behaviors compared to soldiers with no credit card debt, while soldiers with greater amounts of emergency financial savings were more likely to have better financial behaviors than those who had very little or no emergency financial savings. Understanding these financial behaviors helps service providers to reduce the stress and anxiety soldiers and their families experience before a deployment.

We investigated racial/ethnic differences in high return investment ownership using the 2010 Survey of Consumer Finances (SCF). Logistic regression analysis shows that even after controlling for income, risk tolerance, education, and other factors, Black and Hispanic households are less likely to hold high return investments than White households, but Asian/Other households are not different from White households. Based on results from decomposition methods, if the households with Black and with Hispanic respondents have the same characteristics and risk tolerance as White households, the racial/ethnic gap in high return investment ownership would be narrowed, but still exists. The Fairlie decomposition method might be more reasonable to use for decomposition analyses than the Blinder-Oaxaca method.

There are 19 million workers and retirees and $3 trillion of assets in state pension plans. However, questions have arisen about the long-run ability of the plans to pay promised benefits to retirees. Consequently, proposals have been made to reduce promised pension payments or alter other terms of the pension contracts. Yet another heretofore unexplored alternative is to reduce state pension plan management fees by moving from actively managed portfolios to low-fee passively managed accounts. Using state pension plan data for the 2003-2012 decade and returns from three alternative low fee portfolios, it is found that all states could have increased after-fee earnings and improved their long-run ability to pay retirees by moving to the low-fee investment accounts. While clearly relevant for workers and retirees in state pension plans, the findings also have implications for all investors regarding the ongoing debate between active and passive investment management strategies.

A variety of risk assessment questionnaires are used within the financial planning profession to assess client risk preferences. Evidence indicates that the average person overweighs losses relative to an arbitrary reference point. This paper evaluated risk assessment questions on how well they correlate with monetary loss aversion. Twenty-nine Western Texas residents between the ages of 27 and 56 participated in experimental research and filled out several risk assessment questionnaires. Two weeks later their levels of loss aversion were measured using monetary gain and loss scenarios. The individual risk assessment questions were placed into three categories: expected utility theory, prospect theory and self-assessment. Composite measures were created for within-group and between-group comparisons. Statistically significant correlations were found between monetary loss aversion and different composite measures. The results provide financial planners with a group of risk assessment questions that capture loss-averse preferences.

This research sought to further understanding of factors related to low-income household saving behavior. Saving behavior, defined as whether a household spent less than income, was analyzed by applying institutional theory, which proposes that households' institutional environment has a substantial effect on financial decisions. Two logistic regression models were used to test the effects of variables on saving behavior; the first logit was based on the life cycle hypothesis and the second added noneconomic individual factors (i.e., social networks, financial literacy, and psychological variables) and institutional factors (i.e., access, incentives, and facilitation). Institutional factors, including the number of institutions used, credit access, and having an employer sponsored retirement plan, had significant effects even after controlling for the effect of variables based on the life cycle model, suggesting that promoting institutional access and facilitation—especially through employer-provided plans—may encourage saving behavior among low-income households.

The purpose of this study was to evaluate the relationship between holding mortgage debt into retirement and financial satisfaction. Using data from the 2012 National Financial Capability Survey, this study explored the association between holding a mortgage in retirement and financial satisfaction through the use of a two-block hierarchical regression model. The first model of socio-demographics, financial constraints, and financial characteristics revealed a negative relationship between mortgage holders and financial satisfaction. The second model added measures of financial capability and financial beliefs, which revealed strong relationships between comfort with debt, knowledge about mortgages, subjective financial knowledge, and risk tolerance with financial satisfaction. After the addition of financial capability and belief measures, no relationship was found between holding a mortgage and financial satisfaction. Results suggest practitioners should explore their clients' beliefs about debt, as opposed to just the objective costs and benefits, when evaluating whether to hold a mortgage in retirement.

Prior research has found a relationship between the health habits of individuals and their financial well-being. Little research has been conducted, however, to explore the nature of the health-wealth connection. The purpose of this study was to explore and test the association of physical health behaviors, namely exercise and diet, and health information search behaviors, and financial wellness. Using data from the 2008 wave of National Longitudinal Survey of Youth (NLSY79), retirement planning activities were used as a proxy for financial wellness, and self-determination theory as a framework for the analysis, this study found that individuals who engage in health information search behaviors, such as reading the contents and nutrition details of food labels, are more likely to engage in financial planning activities.

Using cross-sectional data, we examined the financial information sources, financial knowledge, and financial practices of young adults, many of whom are first generation college students, ethnic minorities, and immigrants or children of immigrants. Participants (n = 1,249) were undergraduate students at a large regional comprehensive university. The general linear model results suggested personal financial information obtained from parents was positively associated with levels of financial knowledge and financial practices, and information obtained from other family members and college courses was positively associated with better financial practices. The findings suggest that parents and college personal finance courses may serve as positive inputs for financial socialization among young adults regardless of their demographic backgrounds.

A recent meta-analysis of the effect of financial literacy and financial education on downstream financial behaviors has shown a weak collective impact of the work of financial education. While the findings are not stellar, they do not support a dismantling of financial education programs and funding. This paper examines the findings of the meta-analysis and discusses the implications for the field. In this discussion, a more thoughtful consideration of the ways to provide financial education and the manner about how to influence behavior is highlighted. In addition, this article proposes a systematic examination of why timely educational approaches should coexist with longer-term financial education programming. The field also needs a more rigorous examination of factors that impact intervention effectiveness, including a call for improved research protocol and evaluation and a plea for greater visibility between researchers and practitioners.

The Social Security Statement is one of the most important outreach efforts of the Social Security Administration (SSA). In October 1999, SSA began sending out the Statement to inform Americans aged 25 or older about their estimated benefits and their earnings records. This article reviews the Statement's history, discusses how the public uses the Statement in retirement planning, and highlights how the Statement has increased the public's knowledge of Social Security. The article describes SSA tools and publications that the public can use in retirement planning. It concludes with suggestions for how financial educators, counselors, planners, and researchers might use the Statement and related survey data to inform the public about Social Security programs, benefits, and services.

The purpose of this study was to examine associations between saving goals and saving behavior from a perspective of Maslow's Hierarchy. Using 1998-2007 Surveys of Consumer Finance datasets, we analyzed responses given to an open ended saving reason question, and categorized responses into six saving goals. The retirement/security goal was the most frequently mentioned, and the self-actualization goal was the least frequently mentioned. We tested two models to ascertain whether the order of response differed in the likelihood of saving, measured as whether households spent less than income. Model 1 tested the effects of whether particular goals were given as the first response to the open-ended question, and Model 2 tested the effects of whether particular goals were given as any response. In both analyses, self actualization and retirement/security had the strongest associations with saving behavior.

Conflicts of interest (COI) are an ethical issue for financial planners because they impair professional judgment if not addressed. This article describes a quantitative, cross-sectional study of COI recognition in pending engagements and measuring the influence of time in practice and financial planning credentials upon recognition. Participants were 51 graduates of the M.S. degree from the College for Financial Planning. Participants were asked three questions regarding each of the six hypothetical situations of pending financial planning engagements. Each question provided an indicator of COI recognition. Time in practice and financial planning credentials were used as influence factors upon COI recognition. Results indicated high COI recognition involving role conflict and low recognition with family members as clients. Time in practice was related to increased COI recognition involving role conflict. Financial planning credentials were related to increased COI recognition with a business associate as client.

This study uses the 2013 U.S. Survey of Consumer Finances dataset to investigate differences in credit card use between Hispanic and White households. The sample includes 3,784 households, with 3,165 households headed by a White individual and 619 households headed by a Hispanic individual. The results show that the factors related to credit card use differ for the two groups. Risk tolerance, marital status, and education are significant in explaining credit card use for White, but not Hispanic, households. Income is significant in explaining credit card use among Hispanic, but not White, households. When accounting for race/ethnicity only through a dummy variable, researchers may be missing a part of the puzzle in exploring racial/ethnic disparities in financial well-being.

Guided by a proactive coping theory, this online, cross-sectional study examined whether income, savings, debt service-to-income ratio, reluctance to think about finances, locus of control, and financial management competency were related to financial wellness. Based on data from a United States sample (N = 1,039), results of hierarchical regressions indicated that financial management competency, internal locus of control, and savings were positively associated with financial wellness, explaining 43.5% of the variance. Results suggest that, rather than resources themselves, resource allocation and perceived usefulness of financial actions are most critical to financial wellness. Educators and practitioners can emphasize proactive coping through behavioral approaches to financial management that foster greater internal locus of control and financial wellness.

Using data from the Panel Study of Income Dynamics (PSID) Child Development Supplement and Transition into Adulthood, this study compared Whites, Blacks, and Latinos to identify racial and ethnic differences in bank account ownership. Having a bank account as a child was significantly associated with bank account ownership in young adulthood. Black children and young adults lagged in bank account ownership. Parental bank account ownership and family wealth increased the odds of bank account ownership for White children significantly more than for Black children. Financial independence, employment status, and educational attainment of young adults showed greater associations with bank account ownership than family background. Findings call for educational programs and policies to increase opportunities for the bank account ownership of minority youths.

This study used data from online focus groups collected from November 2014 to April 2015 to understand college students’ decision-making processes when borrowing money to finance their education. Data were collected using an online course management system. Results suggest that (a) students relied heavily on advice from parents, guidance counselors, and friends; (b) attending college was not possible without student loans; and (c) students knew very little about the loans they would be responsible for repaying. Recommendations for financial educators and counselors to help student borrowers make prudent decisions about education debt are presented.

To meet college student needs for financial counseling, it is important to assess why they seek counseling and the extent to which differing financial situations are tied to financial stress. This study examined these issues with a sample of 554 college students who participated in financial counseling and found financial problems in various situations were each linked to increased financial stress. Financial stress was positively associated with having student loans and other forms of debt and was higher for female students and lower for those having investments. From a needs assessment perspective, it is apparent that college students may be able to benefit more from comprehensive financial counseling than from financial advising that is tailored primarily to a single issue.

Using data from the 2013 Survey of Consumer Finances, this study evaluates the potential effect of using financial planners on household portfolio performance, which was measured by Sharpe Ratio. Results revealed that households that reported using financial planners demonstrated better portfolio performance than those that did not. This lends empirical support to claims that professional financial planning services provide value to clients. Implications for investors, financial planning professionals, and researchers are discussed. Considering the direct relation between wealth accumulation and portfolio performance, financial planners should explore ways in which to work with those with limited resources to help them realize the benefits of using financial planners and improve their portfolio performance as a result.

The impact of financial stress on college students can range from psychological distress to adverse academic outcomes. The purpose of this study was to identify how resources and perceptions alter the amount of financial stress felt by college students and how this relates to academic achievement. Results from 2,236 Midwestern college students indicate that financial and life stressors, higher subjective financial knowledge, fewer financial resources, negative perceptions, and lower mastery are associated with higher financial stress. Financial stress was not associated with academic achievement, but financial stressors, objective financial knowledge, and financial resources were highly related to financial stress. Increasing available financial resources to students, in addition to providing opportunities to increase financial knowledge for students, would likely be associated with decreased stress and better academic achievement.

The purpose of this study is to investigate whether a professional designation affects consumer choice behavior within the area of investment decision making. Forty-six participants were endowed with real money and received hypothetical investment advice from a certified financial planner (CFP) Professional and a stockbroker. Among low-income households, advice from a CFP altered investor choice behavior within hypothetical education and retirement savings accounts. When participants made investment decisions using education funds and received advice from a CFP, the mean expected value of their investment choices was $43,913, compared to $25,870 given advice from a stockbroker. When investment decisions were made using retirement funds, the average expected value given advice from a CFP and a stockbroker was $53,424 and $33,207, respectively. If an investor was risk-neutral or risk-seeking, investment choices were improved when advice was rendered by a CFP relative to a stockbroker.

This study examined how retirement planning information search was related to retirement savings of working women. By controlling for sociodemographic variables, the study further explored factors associated with individual information sources for retirement planning. An online survey was developed to collect data from a national population, obtaining 591 valid responses. The results showed that women who learned about retirement planning through discussions with friends/relatives tended to save less in their personal retirement savings, whereas those who obtained information from financial advisors tended to save more. Personal income was positively associated with seeking information from financial advisors. The study concluded by discussing the implications for financial service providers, retirement plan marketers, financial educators, researchers, and policymakers.

This research examined the prevalence and amount of care-related out-of-pocket expenditures of family caregivers and the factors that influence this spending. Secondary analysis of 2007 General Social Survey (Cycle 21) data yielded population estimates for Canadians age 45 years and older. Thirty-five percent of respondents—1.2 million Canadians—reported care-related out-of-pocket expenditures, which amounted to almost $12.6 million. Caregivers who were more likely to incur these costs reported higher levels of stress, were caring for a family member or friend with more complex health conditions, were providing more intense levels of care, and lived further away from the care receiver. We find that care-related out-of-pocket spending is common among Canadian caregivers, that it can be substantial, and that relatively few caregivers receive financial supports that can defray these costs.

Financial software offers an appealing substitute for an investment in complex financial knowledge to help individuals make better financial decisions. Little is known, however, about which consumers use financial software and whether the use of financial software results in improved financial outcomes. Using data from the 2008 National Longitudinal Survey of Youth 1979 cohort (NLSY79), we find that respondents with greater human capital and financial resources are more likely to use financial software. The use of a financial software program to calculate retirement needs is a stronger independent predictor of accumulated retirement wealth than calculating retirement needs without a computer aid and is surpassed only by cognitive ability as an independent predictor of retirement savings. Results suggest that financial software is used primarily by those that have greater endowed and attained human capital and may be a complement to (rather than a substitute for) financial literacy.

The purpose of this study was to identify barriers and facilitators of saving behavior in low- to moderate-income households within a framework of predisposing, enabling, and reinforcing factors. Data used were from a U.S. Department of Agriculture/National Institute for Food and Agriculture–sponsored multistate project. With a sample of 757 low- to moderate-income households and hierarchical logistic regression, results indicated that enabling factors and reinforcing factors reduced the significance of predisposing factors such as household income and financial knowledge on the likelihood to save. In the full model, significant predisposing factors included net worth, attitude toward saving, learned about saving from formal sources, marital status, gender, and race. Among the enabling factors, constraints on resources and lack of comfort with financial institutions were perceived as barriers to saving as well as unemployment. Of the reinforcing factors, concern for loss of benefits increased the odds of saving.

Using the 2007–2009 Survey of Consumer Finances panel data, this study examined changes in perceived and realized risk tolerance after the financial crisis. Households who perceived less risk tolerance were more likely to have reduced their portfolio risk and vice versa. Furthermore, households whose wealth decreased were more likely to perceive less risk tolerance and vice versa. Regression analysis revealed that change in risk tolerance as measured by the change in financial portfolio risk is related to perceived risk tolerance, education, life cycle stage, and employment status. Single households, or those households whose head is less educated, or self-employed or unemployed, may need financial advice to prevent them from reducing their portfolio risk in reaction to a financial crisis.

This study investigated the degree to which the financial risk tolerance of individuals was influenced by volatility in the U.S. equities market during the period of the Great Recession. Based on data from a valid and reliable risk tolerance scale and return information for the Standard and Poor’s (S&P) 500 index, there does appear to be some associations between daily market volatility and changes in risk tolerance scores. Changes in risk tolerance scores were also calculated using short- and intermediate-term volatility measures. The relationships do vary, however, with evidence supporting the relationship only 64% of the time. Overall, changes in financial risk tolerance scores were found to be modest. Although not following hypothesized directions at all times, risk tolerance was not influenced by the length of volatility measurements.

In recent years, experimental psychology and behavioral economics have cast doubt on the quality and reliability of individual decision making, especially in complicated choice contexts involving risk and time. These factors imply that financial decision making is particularly subject to such doubts, which has generated calls for increased regulation based on behavioral science to help people avoid imprudent decisions regarding borrowing, such as those implemented by the relatively new Consumer Financial Protection Bureau. This article argues that such interventions are fraught with ethical problems based on the regulators’ inability to appreciate the complex, multifaceted, and subjective interests of borrowers and recommends alternative approaches to helping people make better borrowing decisions while respecting their personal interests.

This research investigates if ethical behaviors and personal finances are related using a large scale U.S. random survey called the National Longitudinal Survey of Youth 1997 (NLSY97). Fifteen indicators covering both ethical and unethical behaviors are compared to net worth for people in their 20s and 30s, who are called Generation Y. Breaking rules, stealing, and being arrested are associated with less wealth in this generation. Results suggest that among people in their early 20s, there is little or no relationship between ethical behaviors and wealth. However, as this cohort ages, a positive relationship between acting more ethically and wealth emerges.

This study explored the relationship between financial literacy and the use of interest-only mortgages using data from the 2009 National Financial Capability Study (NFCS). A series of analyses were conducted to investigate characteristics associated with the use of an interest-only mortgage as a primary mortgage, as compared to fixed-rate mortgage and adjustable-rate mortgage (ARM) options. Consistent results indicate the individuals who incorrectly answered questions related to compound interest, mortgages, and diversification were more likely to be using an interest-only mortgage. Respondents with higher reported math skills were less likely to use an interest-only mortgage, whereas individuals with higher levels of financial confidence were more likely to be using one. These results reinforce concerns about a household’s ability to understand and evaluate complex mortgage products.

A large fraction of South African consumers are highly leveraged, inadequately insured, and/or own little to no assets of value, which increases their exposure not only to idiosyncratic risk but also to severe indebtedness and/or default. This scenario can present negative ramifications that lead well beyond the confines of individual households. Thankfully, it can also be remedied by well-tailored legal debt relief mechanisms. This article reflects on the uncertainties surrounding the consumer debt relief framework of the National Credit Act in an attempt to show why it is not up to the challenge of providing meaningful relief to debt-distressed consumers. Ultimately, a comprehensive review of the current framework in favor of a discharge mechanism on simple, stated terms is proposed.

This article reviews the theories and literature in intrahousehold financial decisions, spousal partners and financial decision making, family system and financial decision process, children, and financial decisions. The article draws conclusions from the literature review and discusses directions for future research and educational programs. Most financial education and counseling takes place at the individual level, whereas financial decisions take place at household and intrahousehold levels. Family members, spouses/partners, children, and others play a key role in individuals’ financial decisions. The article proposes the key programmatic implications for financial professionals and educators that need to be integrated into financial education and counseling. Understanding the unique dynamics of family financial decision making would help create effective educational and counseling strategies for the whole families.

This study analyzed the debt profile of low-income households before and after the Great Recession using the 2007, 2010, and 2013 Survey of Consumer Finances (SCF). We used Heckman selection models to investigate three debt characteristics: (a) the amount of debt, (b) debt-to-income ratio, and (c) debt delinquency. Before and after the Great Recession, results from the selection stage showed the probability of holding debt for households increased as their income level increased (moving into less severe poverty categories); results from the outcome stage indicated households in the most severe poverty category (below 100% of poverty threshold) were less likely to meet debt-to-income ratio guidelines. Following the Great Recession, these lowest income households were more likely to have higher debt and debt delinquency problems.

This article uses a random digit dial probability sample (N = 328) to examine the relationship between credit card use behaviors and household well-being during a period of severe economic recession: The Great Recession. The ability to measure the role of credit card use during a period of recession provides unique insights to the study of credit behavior because of the knowledge that all respondents have the same macroeconomic constraint. Framed by the assumptions of the permanent income hypothesis and the life-cycle savings hypothesis, multinomial logistic regression was used to estimate the relationship between credit card use behaviors and three measures of household well-being: emotional well-being, financial well-being, and general household financial condition.