Evaluating the Efficacy of Credit Card Regulation
Document Type
Article
Publication Date
2005
Department
School of Business
Abstract
In the USA, the Federal Reserve Board (FRB) has adopted a final rule amending the Truth in Lending Act's Regulation Z, effective October 1, 2001. The present study aims to use the elaboration likelihood model to explore how consumers might respond to the revised credit card disclosure requirements, focusing specifically on college students. Each subject was randomly assigned to one of two financial scenarios and asked to choose, among competing offers, the credit card that presented the "best" match to the scenario. Subsequently, all subjects completed measures designed to test hypothesized relationships within the framework of the elaboration likelihood model. College students possess a fairly low level of knowledge of credit cards and thus are not very well equipped to make educated choices concerning such cards. The present research is the first to investigate the impact of the FRB's recently adopted final rule amending the Truth in Lending Act's Regulation Z. The findings should thus be of interest to regulators, credit card issuers, and consumer advocates.
DOI
DOI:10.1108/02652320510591702
First Page
237
Last Page
254
Volume
23
Issue
2/3
ISSN
02652323, 17585937
Recommended Citation
Braunsberger, K., Laurie, L. A., & Roach, D. W. (2005). Evaluating the efficacy of credit card regulation. International Journal of Bank Marketing, 23 (3), 237-254. DOI:10.1108/02652320510591702