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The Phenomenon of Credit Card Debt

Learn about the alarming rise of credit card debt, with $1 trillion outstanding, as 46% households have no balance while others are in increasing debt due to spending enhancements through credit cards. Dive into the impact of sudden debts on low-income earners.

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The Phenomenon of Credit Card Debt

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  1. So…I make $1600 a year and suddenly I owe $3000

  2. CREDIT CARDS ARE A MAJOR PHENOMENA 1700 million- 70 miles into space 78% of households 6 per family $7300-10,780 1 trillion outstanding debt 46% have no balance
  3. ENHANCEMENT OF SPENDING WITH CREDIT CARDS IS PRIMARY CONCERN Work has been descriptive Do credit cards cause spending?
  4. PEOPLE SPEND MORE WITH CREDIT CARDS How are we to understand this relationship? No special aspect Rational Debt socially acceptable
  5. And then…. Social psychology….Berkowitz
  6. Mode of payment may exert influence on consumer behavior
  7. Classical Conditioning as a Theoretical Mechanism
  8. Purchase situations can be controlled by the stimulus properties of the situation rather than solely the instrumental ends served by the purchase. Through experience and use credit cards acquire the ability to elicit spending behavior.
  9. CLASSICAL CONDITIONING Credit cards acquire the ability to elicit spending Spend more, spend more quickly, spending more likely
  10. TABLE 3
  11. DONATION TO CHARITY
  12. CREDIT CARD STIMULI INCREASE TIPPING
  13. APPLIED STUDY – CANDY STORE
  14. CREDIT CARD CUES CAN BE CONDITIONED
  15. *OBEYS LAWS OF CONDITIONING*GENERALIZATION
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