Credit card literacy and financial well-being of college students

Abstract

PurposeBy testing a moderated mediation model, the purpose of this paper is to examine the mediating role of credit card self-efficacy in the relationship between credit card literacy and financial well-being. The authors further examine if credit card number moderates this effect.Design/methodology/approachData for the study were collected from 427 college students. The PROCESS macros in IBM SPSS Statistics 23 was used to assess the hypothesized relationships.FindingsCredit card literacy positively influences financial well-being through self-efficacy. However, this effect is stronger when college students own fewer credit cards.Practical implicationsBanks and credit card issuers, policymakers and colleges and universities should place a greater emphasis on credit card literacy programs that enhance students’ general understanding of credit card terms and conditions and confidence in their ability to effectively use and manage their credit cards.Originality/valueTo our knowledge, this is the first study to examine the relationship between credit card literacy, self-efficacy and financial well-being.