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El trimestre económico
On-line version ISSN 2448-718XPrint version ISSN 0041-3011
Abstract
FARIAS, Pablo. The Determinants of Knowledge of the Total Cost of Cash Advances. El trimestre econ [online]. 2017, vol.84, n.336, pp.847-868. ISSN 2448-718X. https://doi.org/10.20430/ete.v84i336.608.
Background:
There is a wide difference in the total cost of cash advances offered in Chile. A little knowledge of the total cost of cash advances indicates a vulnerable consumer who may be unable to be aware of when and which financial institution to acquire a cash advance.
Methods:
This paper seeks to determine the characteristics of consumers and financial institutions that may be related to a greater or lesser knowledge of the total cost paid in cash advances.
Results:
The results of a hierarchical logistic regression shows that low knowledge of the total cost paid in a cash advance is associated with segments of consumers who do not use the total cost of cash advance as a signal of quality, older consumers, women and those who are not customers of the financial institution that offers the cash advance. The results also suggest that price advertising is effective only for consumers with a low use of the total cost as signal of quality (interaction effect). The other variables examined were not significant.
Conclusions:
This article shows that poor knowledge of the total cost paid in cash advances is not homogeneous between consumers and the financial institutions that offer these cash advances.
Keywords : cash advance; price knowledge; total cost; credit; credit cards.