Effective Practices of Financial Education for College Students: Students' Perceptions of Credit Card Use and Financial Responsibility.

Abstract The purpose of this quasi-experimental nonequivalent control group study was to determine the influence that a financial education intervention administered in First Year Experience courses had on students' perceptions of their financial behavior such as compulsive spending and credit card use. This study utilized the five-point Likert-type scales: Compulsive Buying Scale (d'Astous, Maltais, & Roberge, 1990) and the Degree of Irrational Credit Use Scale (d'Astous, 1990) to assess a student's predisposition to spend compulsively and to make unwise decisions with credit cards. This study included 502 students who were enrolled in a First Year Experience course at a mid-sized land-grant Great Plains university. The data were analyzed using t tests and analysis of covariance to determine if a significant difference existed between the groups. There were significant differences in the Compulsive Buying Scale pretest scores between the men and women, indicating that women may have a higher propensity to compulsively spend than men. Analysis of covariance found significant differences between the control group and both treatment groups for many individual questions on the Compulsive Buying Scale posttest as well as the composite posttest score (p ********** There are more college students who have credit card debt than have student loan debt (Bradley, 2005). It is clear that American college students are lacking a strong background in financial responsibility (Bittiker, 2010; Johnson, 2005; Tan, 2003). Multiple studies address the issue of college students obtaining credit card debt and the ramifications of the inability to manage the debt. A 2002 survey at the Ohio State University reported 67.1% of the university students dropped out of college due to credit card debt. A study by Shim, Xiao, Barber, and Lyons (2009) found that students who had accumulated high amounts of debt had low academic performance (Shim et al., 2009). Adams and Moore (2007) found a relationship between high-risk credit card behavior and individuals who reported being in an abusive relationship or being assaulted. The same study also showed a significant relationship between drug and alcohol abuse and high credit card debt (Adams & Moore, 2007). Shim et al. (2009) believed that the crucial time to provide financial education to individuals is between the ages of 18-25 or during emerging adulthood. According to Arnett (2000), the college years include developmental phases such as dating potential spouses, developing character, and lifetime personality traits. This time period may also include developing the competencies necessary to be financially responsible. College students revealed that one crucial component of which they identify themselves as an adult is the ability to be financially independent from their parents (Arnett, 2000). The financial practices which students develop during their college years are likely to become habits that will continue throughout adulthood (Arnett, 2000). Richins (2011) believed the key to finding a way to educate students on becoming financially responsible is to first address the ability to control compulsive spending. Compulsive spending is defined, according to d'Astous, Maltais, Roberge (1990) as, "the incontrollable urge to buy" (p. 306). Compulsive spending can be the cause of the misuse of credit cards and cause college students to amass credit card debt that they struggle to manage (Richins, 2011). According to d'Astous (1990), if impulse control is the main issue of being financially irresponsible, then teaching delayed gratification could be the method to creating financial responsibility among college students. The U.S. federal government recognized the need to regulate the credit card industry and enacted the Credit Card Accountability Responsibility and Disclosure Act or CARD Act of 2009. …