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Credit Card Debt and the Provision of Financial Support to Kin in the US

Author

Listed:
  • Maude Pugliese

    (Institut National de La Recherche Scientifique)

  • Céline Le Bourdais

    (McGill University)

  • Shelley Clark

    (McGill University)

Abstract

Credit card debt stands at over $1 trillion in the US and grows continuously. Scholars have argued that high (and growing) levels of credit card debt are attributable in part to rising economic vulnerabilities, combined with a thinning public safety net, credit cards being increasingly employed to make ends meet in this context. This paper extends this line of work by stressing that individuals and households do not rely on their credit cards only to mitigate their own financial hardships, but also those experienced by their non-coresidential kin members. More specifically, building on the notion that kin networks can constitute a source of negative social capital, we argue that individuals often accumulate credit card debt as they attempt to provide monetary assistance to their relatives in need. We also show that this effect is particularly strong in lower-income groups and in African American communities, in which need levels are especially high. Based on random and fixed effects analyses of data from the Panel Study of Income Dynamics, these insights extend scholarship on both kin networks of support and the sources of credit card debt.

Suggested Citation

  • Maude Pugliese & Céline Le Bourdais & Shelley Clark, 2021. "Credit Card Debt and the Provision of Financial Support to Kin in the US," Journal of Family and Economic Issues, Springer, vol. 42(4), pages 616-632, December.
    • Handle: RePEc:kap:jfamec:v:42:y:2021:i:4:d:10.1007_s10834-020-09731-7
    DOI: 10.1007/s10834-020-09731-7
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    References listed on IDEAS

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    Cited by:

    1. Chih-Hsiung Chang, 2022. "Information Asymmetry and Card Debt Crisis in Taiwan," Bulletin of Applied Economics, Risk Market Journals, vol. 9(2), pages 123-145.

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