Research

Credit Counseling Helps
* Financial Behaviors of Consumers in Credit Counseling, International Journal of Consumer Studies, 2006, Xiao, Sorhaindo, & Garman.

Abstract

Positive financial behaviours of consumers are examined using a national sample of consumers who use credit counselling services in the US from a behavioural economic perspective. The findings indicate that consumers in credit counselling may follow a hierarchical pattern in their financial behaviours, paying off debts and adjusting spending before considering saving. Consumers who are older, have a part-time job (vs. the unemployed), and report a more secure retirement, a better family relationship, and a higher score of self-evaluation of financial behaviours are likely to report more positive financial behaviours. Reporting more financial behaviours and a higher score of self-evaluation of financial behaviours, along with several demographic and perception variables, tend to reduce financial stress and increase financial satisfaction among consumers who use credit counselling services.

Consumer borrowing is closely related to the financial health of America's households. ¹ Many consumers may be experiencing financial troubles, which is indicated by at least two facts. In 2002, outstanding household debt increased by more than 9%, the largest rate of increase since 1989, whilst non-business bankruptcy filings reached record highs. ² Traditional consumer credit counselling services have provided assistance in helping these debt troubled consumers since the 1970s. Read more (PDF)...