Credit Card Debt: Nescience or Necessity? - Economic Research Forum (ERF)

Credit Card Debt: Nescience or Necessity?

G. Gulsun Akin, Ahmet Faruk Aysan, Sezgim Dasdogen and Levent Yildiran

July, 2019


28 pages

Economic Research Forum

G2. Financial Institutions and Services
O1. Economic Development

This paper attempts to assess whether the driving factor behind the rising credit card indebtedness of consumers in Turkey is financial illiteracy. Using the results of a nationwide survey, the authors conclude that even though credit card borrowing frequency and debt amount are affected by components of financial literacy, being credit-constrained has a very pronounced impact. An exploratory analysis finds that the probability of irrational credit card borrowing is increased by being credit-constrained but not affected by financial literacy. These findings suggest that credit card debt is at least as much a result of necessity as nescience.


G. Gulsun Akin

Bogazici University


Ahmet Faruk Aysan

Dean of the School of Management And Administrative Sciences at the Istanbul Sehir University


Sezgim Dasdogen

Department of Economics, Bogazici University


Levent Yildiran

Bogazici University



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