Study Says Facebook and Credit Card Debt are Related
New research reveals a startling finding about credit card debt: it may be the product of friendships and social networks.
The study, which appears in the Journal of Consumer Research, shows a positive correlation between time spent on Facebook and credit card debt. Researchers tested the idea on candidates, giving them access to the social networking site before asking them to participate in several real world decision-making problems.
The study confirms what some have named “lifestyle inflation,” more colloquially known as “keeping up with the Joneses.” After spending only five minutes on Facebook, participants in the study were more likely to spend freely and make poorer decisions about their personal health. The reason, researchers believe, is an internal desire to keep up with their friends habits – habits which are broadcast in photos and status updates on Facebook.
Researchers find that the effects of Facebook on consumer spending habits transcend all socio-economic boundaries. Adjusting for income, wealthier shoppers spent more after viewing Facebook as did poorer shoppers in the study.
The results show that the best way to handle financial issues is to counteract your own natural desires. Exposing yourself to photos and updates from friends buying new cars, homes, or enjoying costly vacations pushes some credit card users to spend more heavily in their daily lives.
