Examining the Contributory Factors Influencing Credit Card Debt among Consumers in Malaysia
Abstract
The purpose of this study is to analyze the key factors of socioeconomic, psychological behavioral, and credit card practices that contribute to credit card debt accumulation among Malaysian consumers. The aim is to understand debt patterns and develop evidence-based recommendations for improved financial management and policy intervention. It acknowledges a lack of understanding and a single definitive credit card debt. The study observed frameworks from impulsive buying theory, terror management theory, and neoclassical theory. The study uses a quantitative method based on a survey conducted on 384 respondents from various demographics in Malaysia and analyzed using SPSS software. This study found that impulsive buying, self-esteem, financial education, marketing and promotion, and interest rates play key roles in fostering consumer credit card debt. These findings have important implications for consumers, financial institutions, and policymakers in establishing responsible lending practices. Understanding the intricate relationship between these factors sheds light on the psychological underpinnings of consumers’ financial decisions. The sensitivity of consumer behavior towards credit card debt underscores the pivotal role that policymakers can play in shaping a financial environment conducive to economic growth and the protection of consumers.
Keywords: credit card debt, impulsive buying, financial knowledge, marketing & promotion and interest rate
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