Credit Card Misuse, Money Attitudes, and Compulsive Buying Behaviors: A Comparison of Internal and External Locus of Control (LOC) Consumers.
This study examined attitudinal and behavioral differences between internal and external locus of control (LOC) consumers on credit card misuse, the importance of money, and compulsive buying. Using multiple analysis of variance and separate analyses of variance, internal LOC consumers were found to have lower scores on credit card misuse and attitudes toward money than external LOC consumers. External LOC consumers were found to have scores closer to compulsive buying behaviors. Chi-square test of independence revealed that the proportion of external LOC consumers classified as compulsive buyers was significantly higher than the proportion of internal LOC consumers classified as compulsive buyers. ********** With credit card debt, loan defaults, and other financial problems on the rise, researchers have focused greater attention on understanding the factors that explain college students' behavioral and attitudinal differences toward credit cards, money, and compulsive purchases (Joo, Grable, & Bagwell, 2003; Palmer, Pinto, & Parente, 2001; Pirog & Roberts, 2007). An underutilized construct that may explain such differences is locus of control (LOC). Defined as the extent to which individuals believe that they control their outcomes, LOC consists of two distinct belief orientations (Rotter, 1966; Lira, Teo, & Loo, 2003): (1) internals, who perceive that they control what happens to them; and (2) externals, who perceive that factors outside of their control influence what happens to them. Although LOC research in marketing has focused on predicting behavioral differences between internals and externals in buying situations (Kongsompong, 2006; Rudnick & Deni. 1980), there are limited studies that examine the attitudinal and behavioral differences between internals and externals on credit card misuse (Pirog & Roberts, 2007), money attitudes (Lim et al., 2003), and compulsive buying. This is unfortunate, because external LOC persons feel the need to gain control of their lives through external controls in their environment (DeSarbo & Edwards, 1996; Kongsompong, 2006). As such, research studies have suggested that external LOC consumers and internal LOC consumers hold discrepant views toward credit, money, and purchase behaviors. Specifically, externals are believed to have more positive attitudes toward money and credit (Joo et al., 2003; Luna-Arocas & Tang, 2004), are less likely to manage credit cards and money responsibly (Hayhoe, Leach, & Turner, 1999; Lea, Webley, & Walker, 1995; Tokunaga, 1993), and are more likely to shop compulsively (DeSarbo & Edwards, 1996; Dessart & Kuylen, 1986) than internals. This paper examines the attitudinal and behavioral differences between internal and external LOC consumers on credit card misuse, the importance of money, and compulsive purchasing. Based on the preceding discussion, it is predicted that internal LOC consumers will have lower scores than external LOC consumers on credit card misuse (H1) and money attitudes (H2), whereas external LOC consumers will have scores closer to compulsive buying behaviors (H3) and a significantly higher proportion of compulsive buyers (H4) than internal LOC consumers. Method Self-report surveys were administered in class to 129 undergraduate and graduate students attending two public universities located in the midwestern and eastern United States. Three incomplete questionnaires were excluded from the final analysis. The final sample was comprised of 126 respondents. The questionnaire took approximately 20 minutes to complete. Respondents ranged in age from 19 to 49 (mean = 26.4, standard deviation [sd] = 6.53). A total of 71 undergraduate students (56.3 percent) and 55 graduate students (43.7 percent) completed the questionnaire. The sample consisted of 83 males (65.9 percent) and 43 females (34.1 percent). Most of the sample was Caucasian (77. …