Consumer debt decisions and credit card delinquency in the UK

he chief undertaking of this study is to investigate consumer debt decisions and identify the factors that may lead to credit card delinquency. We base the analysis on the UK and present a synthesis of these findings with respect to education and policy making. The thesis: summarises relevant academic literature and key policy debates; explores new approaches to decision making under uncertainty; makes a case for measures to imprOve financial literacy; employs the recently accessible UK Wealth and Assets survey (WAS) that is not yet the basis for published research findings in the area of consumer debt;1 uses appropriate empirical methods to discover the factors that increase risk of credit card delinquency amongst the 16-35 age group. With respect to credit card delinquency, the study concludes that personal demographic and socio-economic characteristics which have been found to be relevant predictors of fragile personal finances in previous research are relevant also in the case of credit card delinquency amongst young persons in the UK. Gender, ethnicity and education are discovered to be important determinants of the risk of delinquency and there is some evidence that personal attitudes to financial risk may also be relevant. With respect to financial literacy and policy making, the study concludes that there is a need for the Government and the policy makers to promote financial education across the population with emphasis on young adults, particularly males without Higher Education and ethnic minorities. Moreover, policy makers should acknowledge the presence of uncertainty in consumer debt decisions and incorporate seminars on risk awareness in the educational system and labour market.