Financial literacy, money management skill and credit card repayments

This paper studies the relationship between socio-economic factors, financial literacy, money management skill, overspending and impulsiveness on credit card repayment decisions. Analysis based on a sample of 451 credit card users in Malaysia showed that socio-economic factors related to education, income, ethnicity, marital status and number of credit cards held influence credit card repayment decisions. Financial literacy and money management skill have a positive effect on credit cardholders' decision making. Specifically, money management skill related to financial statements monitoring, prompt bill payment, spending within budget and handling money matters well influence credit card repayments. However, personality traits such as overspending and impulsiveness do not exert a significant effect on credit card payment behaviour. The findings of this study support the argument that financial education and behavioural intervention that inculcate good money management skill are important in shaping individuals' behaviour.