Chapter

The Psychology of Debt in Poor Households in Britain

Stephen E. G. Lea, Avril J. Mewse and Wendy Wrapson

in A Debtor World

Published in print October 2012 | ISBN: 9780199873722
Published online January 2013 | e-ISBN: 9780199980000 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199873722.003.0006
The Psychology of Debt in Poor Households in Britain

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This chapter summarizes the major findings of two decades of ongoing survey research probing the psychology of debt amongst the United Kingdom's most severe, as well as more moderate debtor populations. It shows that peoples' lay understandings of the concept of “debt” differs dramatically from that of an economist or accountant, with the categorization “debt” being an adverse characterization reserved for default or nonpayment. Mere credit use according to agreed terms does not register as “debt” in peoples' minds. How people categorize “debt,” though, and the relative tolerance of their attitudes toward debt, also seem to be a function of their own debtor status, in a consequential rather than a causative sense, as cognitive dissonance and self-perception theory would predict. Someone who has not used credit will more readily categorize any credit use as “debt” with a strongly averse attitude thereto, but when that same person does begin using credit (e.g., upon attending university), this credit use is no longer categorized as “debt” and is now viewed with tolerance and sympathy.

Keywords: debt; credit cards; UK; debtor populations

Chapter.  7523 words. 

Subjects: Company and Commercial Law

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