A profile of financially at-risk college students from an emerging market

This article deals with this issue in a relevant emerging market and in a pioneering manner. University students (n = 769), in São Paulo/Brazil, replied to a questionnaire about their credit card use habits. Using Logit models it was seen that there exist associations between personal characteristics and credit card use habits that involve financially risky behavior. The two main results were: i) larger number of credit cards increase the probability of risky behavior; ii) those students who alleged they knew what interest rates the card administrators were charging were less inclined to engage in risky behavior. Although conscious of the fact that the results are based on data collected in a single city, which might constitute a limitation of this article, it has to be emphasized that this is Brazil’s main financial center. The results are of interest to the financial industry, to university managers and to public policy makers. The results point to the advisability, indeed necessity, of providing students with information about the use of financial products (notably credit cards) bearing in mind the high interest rates which their users are charged. The findings regarding student behavior in the use of credit cards in emerging economies are both significant and relevant. Furthermore, financial literature, at the same time that it states the importance of the topic, has not significantly examined emerging economies, a group of promising markets.