The Credit Card Debt Pressure And Stress

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The use of credit cards has advantages and disadvantages, depending on the pattern of use of the consumer. The prudent and correct use of a credit card reduces individual liquidity risk and provides additional resources. However, credit card expenditures unconscious and over-budgetary limits may cause individuals to have excessive debt creating financial difficulties or leading to bankruptcies. Therefore it is necessary for individuals to have information about financial issues and credit cards to decrease credit card debt and to have conscious use of a credit card. Numerous studies used surveys from college students to analyze factors related to credit card borrowing behavior. Hayhoe (2000) found that an affective credit disposition, financial practices, and financial stressors are related to keeping a balance of credit cards. A few studies used data from developing countries to research credit card borrowing behaviors. Wickramasinghe and Gurugamage (2009) use Sri Lankan data and found that the debt ceiling significantly contributed to credit card indebtedness. Lyons (2008) identified several demographic and financial factors related to a debt of over $1,000 in credit cards. Wang and Xiao (2009) found that credit card debt was influenced by buying patterns and social networks.

Debt affects the financial well-being and money problems as well as it can also affect physical and emotional health. Debt and stress often go hand-in-hand. Debt stress can cause health and affect personal and professional life.

There is a connection between debt and stress. According to a 2016 study by Nerdwallet, the average U.S. household with credit card debt has $16,748 and owes $134,643 for an average household with any debt. According to a telephone survey of 1,004 U.S. adults conducted by Harris Poll on behalf of the AICPA, 56% of Americans with debt said their lives had been adversely affected by this. Furthermore, 28% said their debt had put stress on daily financial decisions, while 21% said it had caused tension with their companion; 19% said they had received letters or calls from collection agencies.

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In addition, the legal dictionary (2016) stated that indebtedness is the state of debt, or owing money to someone else. When someone is in debt it means he has received money borrowed goods or services with a promise to pay back the sum. For example, policies that limit the minimum age of ownership of credit cards can affect even those who are not vulnerable to credit card indebtedness and thus inhibit their rights to financial freedom (Braunsberger, 2004; Wood, 2010).

Norvilitis and SantaMaria (2002) discussed that when the ability to manage money and spend declines wisely, one's psychological health decline. The more stressful the individual has the greater the chance to write a check with insufficient funds. In comparison, those with lower credit card debt levels had less financial stress and were more likely to save money (Hayhoe, et al., 2000).

In the above context, there are two areas where credit cards have raised concerns. Such as; whether consumers fully understand the prices and consequences of using credit cards, and whether credit cards have stimulated widespread over-indebtedness, especially among those least able to pay. In 2000, Durkin described these two issues as being related because a lack of understanding may result in over-indebtedness. Therefore, the level of intellectual comprehension and understanding of credit cards by an individual and their use, expertise, and ability to compare information on credit card costs and personal finance literacy have become very critical (Feinberg, 1986; Mitchell, 1989; Astous and Miquelon, 1991; Berlin and Mester, 2004; Kim et al., 2005). Specifically in a time when credit cards have been heavily marketed and sold, and when credit card issuers have penetrated multiple demographic and socio-economic markets by reducing eligibility standards and requirements.

Specifically, Drentea's (2000) results suggest that higher levels of stress and persistent anxiety correlate a greater debt-income ratio of the credit card. This psychological distress can, in extreme cases, turn into impaired mental health, social functioning problems (Norvilitis, 2006), and in rare cases, suicides (Mannings, 1999).

The literature confirms a correlation between debt pressures and both physical and mental ill-health, such as Marmot (1997), Kempson (2002), Brown (2005); and Duygan-Bump and Grant (2009). Therefore, individuals capable of perceiving the ill-being arising from the debt would be more mindful of the use and less susceptible to credit card indebtedness. The ill-being concept is, therefore, an important component of the use of the card and debt in the model. Socio-economic status is correlated with mental health by social scientists (Dohrenwend, 1992; Kessler, 1982; Link, Lemon, and Dohrenwend, 1993; Adair, 1992). The statement that credit card debt is traumatic and has an effect on personal well-being is accounted for many reasons: credit card debt is correlated with short-term and long-term financial hardship; is reflective of financial hardship; because credit card debt is unsecured as a result, collection agencies use aggressive tactics. Credit card debt study and debt stress show that both are correlated with the worse physical condition (Drentea, Salaries, and Schorr, 1998) and mental health where anxiety rises. 

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