Credit cards, financial responsibility, and college students: an experimental study

Policymakers are concerned about the limited financial expertise of young adults because their naiveté leaves them vulnerable to the perils of excess debt. We report the results of three experiments designed to investigate college students' mental representations of credit cards, focusing on linkages to financial responsibility. Students complete an inferential reasoning task in which they assess conditional relations to provide evidence on their rudimentary understanding of what credit card ownership entails. The findings suggest that students readily associate credit card ownership with the need to exercise financial responsibility. Yet, they have difficulty correctly assessing conditional relations. While these young adults believe that they should be financially responsible, their mental models do not fully describe the linkages between credit card ownership and financial responsibility. Additional investigation indicates that analogical transfer can be used to enrich students' mental models, underscoring an obligation to exercise financial responsibility.