Explaining the use of refund anticipation loans by low-income individuals using the theory of planned behavior

This dissertation studies the use of refund anticipation loans by low-income individuals using the theory of planned behavior. Do the individuals' attitudes, subjective norms, and perceived success of getting the loan influence their decision in using this type of financial product?;A review of the literature shows numerous studies using the theory of planned behavior to predict an individual's behavior; however, few studies attempt to predict a consumer's use of credit. A recent study examined the effect a consumer's attitude had on the choice of credit and found that there is a relationship between a person's attitude and their choice of credit. Most studies on credit focused on the use of credit cards by low-income individuals, and did not deal with the refund anticipation loan product, which is part of a group of financial products that recently have become popular with low-income individuals. Data was collected from the database of a professional tax franchise in the Greater Chicago area. The findings of the study show that the theory of planned behavior could not explain low income use of the refund anticipation loan. It found that their were no significant differences in the attitude of the ral and the non-ral user. It found that contrary to the theory, the subjective norms of the ral user was negative, however they continued to use the product anyway, while the subjective norms of the non-ral user was positive and they did not use the product. Finally the study found that while both groups had positive perceived behavioral control scores, the non-ral group had higher scores in this area than the ral group. The importance of this study is in the fact that the views and attitudes, which control the behavior of low-income consumers using refund anticipation loans is unknown. For providers as well as its critics this study will add valuable insight into the characteristics of their customer and how best to market the product to these individuals in the future.