Paying with plastic: a study of credit card debt

Authors: Karen Rowlingson, Elaine Kempson
Published by: Policy Studies Institute
Publication date: 1994
Report number: PSI Research Report 750
ISBN:0853745846

This mid-nineties study examined how people uses their cards and the reasons for credit card default. Its results dispelled the then popular image of a credit card defaulter as a young, irresponsible spender. For example:

• Credit cards were used most by people in their 30s and 40s, especially if they had children.
• While there were some people who overspent, the main reason for default was found to be loss of income, often through small business failure.
• There were a number of credit card holders who defaulted because they simply misunderstood the system of payment, or were just disorganised.
• There was no evidence that credit card companies were issuing cards to people who could not afford to use them.
• Customers who defaulted were surprised by the relatively sympathetic approach adopted by the credit card company.