Study: Credit card debt boosts self-esteem in young adults

By , CardRatings contributor
  • Google +
  • Twitter
  • Facebook
credit card

Contrary to what most people might assume, credit card debt and student loans don't make young adults more anxious about their finances. In fact, a new study shows that debt actually boosts young adults' self-esteem and makes them feel more in control of their lives.

According to sociology research conducted at Ohio State University by assistant professor Rachel Dwyer, young adults between the ages of 18 and 27 feel empowered by debt - and the greater the amount of their student loans and credit card debt, the better they feel. However, as these people get older and settle into careers and homes - in the age range of 28 to 34 - they begin to feel more pressure and stress about debt, especially if they still have unpaid student loans.

Among the findings of this study, which was recently published in Social Science Research, were conclusions about the debate over whether debt is a valuable resource for young adults or a dangerous risk. Despite theories that credit card debt and student loans would each be viewed differently, the study concluded that both types of debt have positive effects on young adults' self-esteem - which means that signing up for the best credit card deals has the same impact as taking out a student loan for a Ph.D.

The confidence-boosting effect of debt was especially pronounced for young adults coming from middle- and lower-class backgrounds. All types of debt were empowering to lower-class young adults, but while middle-class students gained confidence from credit card spending, student loans had no impact on this demographic, probably because they are so common.

Although loans are a powerful way for students to gain access to educational and work opportunities, credit card debt can open doors to dangerous spending habits in the future - especially if young adults rely on them to boost their confidence and sense of worth without considering the financial consequences.


0 Responses to "Study: Credit card debt boosts self-esteem in young adults"

No Comments

Leave a Comment
About Our Ratings ×

Our editors rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. Ratings vary by category, and the same card may receive a certain number of stars in one category and a higher or lower number in another.

The ratings are the expert opinion of our editors, and not influenced by any remuneration this site may receive from card issuers.

Advertisers in our database are highlighted, and advertisements include an option to apply using links on our site. CardRatings.com may be compensated by companies mentioned on the site when a user's application is accepted or approved by such companies.

How do your cards stack up?

Compare your card starting here


Featured Partner Cards