Cognitive Processing of Consumer Credit Offers
This thesis contributes to the understanding of consumer credit decisions from a psychological point of view by investigating the influence of cognitive processes on perceived credit attractiveness and credit choice. A total of seven empirical lab studies conducted with university students in 2014 and 2015 can be grouped into three connected streams: The first stream focuses on the question whether the level of mental abstraction influences preferences for specific credit aspects (e.g., a low annual percentage rate). Participants' choice among several credit alternatives with full information on all credit aspects was not affected by construal level. Nor did construal level influence what participants perceived to be important when making up their mind about credit offers in general. The second stream focuses on the question how mental abstraction and the 0 in 0%-interest credits interact to influence credit evaluation as well as the choice of the product that is to be financed. Contrary to assumptions based on previous findings, participants did not react particularly positive towards 0%-interest credit offers in general, nor did mental abstraction influence their reaction. Also, the other way round, additional findings suggest that the prominent display of the number 0 in 0%-interest credit advertisement does not induce a higher level of mental abstraction and consequently does not influence the type of product to be financed on credit. The third stream focuses on the question whether consumers are more willing to take up a 0%-interest credit when they process information in a more intuitive and heuristic way. The idea behind this is that the central feature of a 0%-interest rate may divert attention from less advantageous aspects of such credits (e.g., an expensive mandatory residual debt insurance). The findings from the studies reject this hypothesis. Furthermore, it was investigated whether intended hedonic product use, as opposed to intended utilitarian product use, leads to higher credit attractiveness under intuitive information processing because of a carry-over effect of positive affect from anticipated use situations. No indication of such an interaction was found in the respective study. The thesis offers detailed interpretation of the results with a focus on possible explanations for the absence of significant effects. Despite the absence of significant results, the thesis makes a valuable contribution to the respective area of research. It highlights the need for research on 0%-interest credit offers as a new form of credit that is likely to accelerate the trend of growing debt accumulation. Also, the thesis is the first to apply two broadly successful theories – construal level theory and System 1 / 2 information processing – to aspects of decision-making in a consumer credit context. The results even more so show how little is known about how consumers process information when making such important decisions. The synthesis of previous findings reported in the theory section of this thesis furthermore points out the alarmingly low levels of credit understanding in the general population. This highlights the need for governments, and consumer protection institutions to invest more effort into the development and application of measures targeted to improve credit understanding and money management in a broader sense.