Evaluating and budgeting with instalment credit: An interview study

This paper examines the role of instalment credit in personal budgeting, and the way people evaluate it. Evaluation is considered mainly in terms of the important notion of the mental account. It is proposed that consumers utilise a dual representation of instalment credit based on total accounts and recurrent budget period accounts. A study is reported in which mature adults were presented with advertisements for in-store credit. These were the focus of interviews aimed at eliciting spontaneous evaluations and views of instalment credit. A content analysis illustrated some of the ways that consumers construe it in terms of total and recurrent budget period accounts. It is concluded that mental accounts are ‘natural’ representations which serve useful functions in personal budgeting; they help consumers to control the balance between income and expenditure over indefinite time periods.