This research examines how credit card debt affects consumer spending. In five experimental and field studies, the authors demonstrate that outstanding credit card debt increases spending for consumers with high self-control. They also show that this effect can be eliminated by increasing the available credit on the credit card. Thus, when the available credit is low, consumers with greater self-control increase spending, but when the available credit is high, they reduce spending. The results extend the literature on goal violation and self-control and offer insights into consumer decision making and consumption patterns under conditions of debt.
AikenLeona, and WestStephen G. (1991) Multiple Regression: Testing and Interpreting Interactions.Newbury Park, CA: Sage Publications.
2.
AndoAlbert, and ModiglianiFranco (1963), “The ‘Life Cycle’ Hypothesis of Saving: Aggregate Implications and Tests,”American Economic Review, 53 (March), 55–84.
3.
AndrewsEdmund L. (2009) Busted: Life Inside the Great Mortgage Meltdown.New York: W.W. Norton & Company.
4.
BaumeisterRoy F., and HeathertonTodd F. (1996), “Self-Regulation Failure: An Overview,”Psychological Inquiry, 7(1), 1–14.
5.
BaumeisterRoy F., and VohsKathleen D. (2004), “Self-Regulation,” in Character Strengths and Virtues: A Handbook and Classification, PetersonChristopher, and SeligmanMartin, eds. Washington, DC/New York: American Psychological Association/Oxford Press, 499–516.
6.
ChoiCandice, and ConnellyEileen (2010), “New Credit Card Laws: What You Need to Know About Rates and Fees,” (accessed April 11, 2011), [available at http://www.huffingtonpost.com].
7.
CochranWinona, and TesserAbraham (1996), “The ‘What the Hell Effect’: Some Effects of Goal Proximity and Goal Framing on Performance,” in Striving and Feeling: Interactions Among Goals. Affect, and Self-Regulation, MartinLeonard L., and TesserAbraham, eds. Mahwah, NJ: Lawrence Erlbaum & Associates, 99–120.
8.
CurrySusan J., MarlattAlan G., and GordonJudith R. (1987), “Abstinence Violation Effect: Validation of an Attributional Construct with Smoking Cessation,”Journal of Consulting and Clinical Psychology, 55(2), 145–49.
9.
DharRavi, HuberJoel, and KhanUzma (2007), “The Shopping Momentum Effect,”Journal of Marketing Research, 44 (August), 370–78.
FaberRonald J., and O'GuinnThomas (1992), “A Clinical Screener for Compulsive Buying,”Journal of Consumer Research, 19(3), 459–69.
13.
FeinbergRichard A. (1986), “Credit Cards as Spending Facilitating Stimuli: A Conditioning interpretation,”Journal of Consumer Research, 13 (December), 348–56.
FosterKevin, MeijerErik, SchuhScott, and ZabekMichael A. (2010), “The 2008 Survey of Consumer Payment Choice,”Federal Reserve Bank of Boston, No. 09-10, (accessed June 20, 2011), [available at http://www.bos.frb.org/economic/ppdp/2009/ppdp0910.pdf].
16.
Giner-SorollaRoger (2001), “Guilty Pleasures and Grim Necessities: Affective Attitudes in Dilemmas of Self-Control,”Journal of Personality and Social Psychology, 80(2), 206–221.
17.
GoodmanPeter S., and HealyJack (2009), “Job Losses Push Safer Mortgages to Foreclosure,”The New York Times, (May 25), A1.
18.
HarderDavid H., and ZalmaAlysa (1990), “Two Promising Shame and Guilt Scales: A Construct Validity Comparison,”Journal of Personality Assessment, 55(3-4), 729–45.
19.
HeathChip, and SollJack B. (1996), “Mental Budgeting and Consumer Decisions,”Journal of Consumer Research, 23 (June), 40–52.
20.
HermanPeter C., and MackDeborah (1975), “Restrained and Unrestrained Eating,”Journal of Personality, 43(4), 647–60.
21.
HermanPeter C., and PolivyJanet (1996), “What Does Abnormal Eating Tell Us About Normal Eating?” in Food Choice, Acceptance, and Consumption, MeiselmanH., and MacFieHerbert L., eds. London: Blackie Academic & Professional, 207–238.
22.
HermanPeter C., and PolivyJanet (2010), “The Self Regulation of Eating: Theoretical Practical Problems,” in Handbook of Self-Regulation: Research, Theory, and Applications, 2d ed., BaumeisterRoy F., and VohsKathleen D., eds. New York: Guilford, 522–36.
23.
HirschmanElizabeth (1979), “Differences in Consumer Purchase Behavior by Credit Card Payment System,”Journal of Consumer Research, 6 (June), 58–66.
24.
InmanJ. Jeffrey, WinerRussell S., and FerraroRosellina (2009), “The Interplay Among Category Characteristics, Customer Characteristics, and Customer Activities on In-Store Decision Making,”Journal of Marketing, 73 (September), 19–29.
25.
JohnOliver P., and SrivastavaSanjay (1999), “The Big Five Trait Taxonomy: History, Measurement, and Theoretical Perspectives,” in Handbook of Personality: Theory and Research, 2d ed., PervinLawrence A., and JohnOliver P., eds. New York: Guilford, 102–138.
26.
MorewedgeCarey K., HoltzmanLeif, and EpleyNicholas (2007), “Unfixed Resources: Perceived Costs, Consumption, and the Accessible Account Effect,”Journal of Consumer Research, 34(4), 459–67.
27.
MuravenMark, Lorraine CollinsR., MorsheimerElizabeth T., ShiffmanSaul, and PatyJean A. (2005), “The Morning After: Limit Violations and the Self-Regulation of Alcohol Consumption,”Psychology of Addictive Behaviors, 19(3), 253–62.
28.
Navarro-MartinezDaniel, SalisburyLinda Court, LemonKatherine N., StewartNeil, MatthewsWilliam J., and HarrisAdam J. L. (2011), “Minimum Required Payment and Supplemental Information Disclosure Effects on Consumer Debt Repayment Decisions,”Journal of Marketing Research, 48(Special Issue), S60–S77.
29.
ReportNilson (2009a), “Consumer Payment Systems in the U.S.,”939 (December), [available at http://www.nilsonreport.com].
O'GuinnThomas C., and FaberRonald J. (1989), “Compulsive Buying: A Phenomenological Exploration,”Journal of Consumer Research, 16 (September), 147–57.
32.
PolivyJanet (1976), “Perception of Calories and Regulation of Intake in Restrained and Unrestrained Subjects,”Addictive Behaviors, 1(3), 237–43.
33.
PolivyJanet, and Peter HermanC. (1985), “Dieting as a Problem in Behavioral Medicine,” in Advances in Behavioral Medicine, KatkinEdward S., and ManuckSteven B., eds. New York: JAI Press, 1–37.
34.
PreacherKristopher J., and HayesAndrew F. (2008), “Asymptotic and Resampling Strategies for Assessing and Comparing Indirect Effects in Multiple Mediator Models,”Behavior Research Methods, 40 (August), 879–91.
35.
PrelecDrazen, and LoewensteinGeorge (1998), “The Red and the Black: Mental Accounting of Savings and Debt,”Marketing Science, 17(1), 4–28.
36.
PrelecDrazen, and SimesterDuncan (2001), “Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay,”Marketing Letters, 12(1), 5–12.
37.
RaghubirPriya, and SrivastavaJoydeep (2009), “The Denomination Effect,”Journal of Consumer Research, 36 (December), 701–713.
38.
RickScott, CryderCynthia, and LoewensteinGeorge (2008), “Tightwads and Spendthrifts,”Journal of Consumer Research, 34(6), 767–82.
39.
RudermanAudrey J., BelzerLaurie J., and HalperinAhouva (1985), “Restraint, Anticipated Consumption, and Overeating,”Journal of Abnormal Psychology, 94(4), 547–55.
SomanDilip, and CheemaAmar (2002), “The Effect of Credit on Spending Decisions: The Role of the Credit Limit and Credibility,”Marketing Science, 21(1), 32–53.
42.
SomanDilip, and CheemaAmar (2004), “When Goals Are Counterproductive: The Effects of Violation of a Behavioral Goal on Subsequent Performance,”Journal of Consumer Research, 31 (June), 52–62.
43.
SpillerStephen A. (2011), “Opportunity Cost Consideration,”Journal of Consumer Research, 38 (December), forthcoming.
44.
TangneyJune P., BaumeisterRoy F., and BooneAngie L. (2004), “High Self-Control Predicts Good Adjustment, Less Pathology, Better Grades, and Interpersonal Success,”Journal of Personality, 72(2), 271–324.
45.
U.S. Congress Joint Economic Committee (2009), “Vicious Cycle: How Unfair Credit Card Company Practices Are Squeezing Consumers and Undermining the Recovery,” (May), (accessed February 8, 2010), [available at http://jec.senate.gov].
46.
WilcoxKeith, VallenBeth, BlockLauren, and FitzsimonsGavan J. (2009), “Vicarious Goal Fulfillment: When the Mere Presence of a Healthy Option Leads to an Ironically Indulgent Decision,”Journal of Consumer Research, 36(3), 380–93.
47.
WoolseyBen, and SchulzMatt (2010), “Credit Card Statistics, Industry Facts, Debt Statistics,” (accessed June 4, 2010), [available at http://www.creditcards.com].
48.
ZhaoXinshu, LynchJohn G.Jr., and ChenQimei (2010), “Reconsidering Baron and Kenny: Myths and Truths About Mediation Analysis,”Journal of Consumer Research, 37(2), 197–206.
