“I’ll always be in debt”: Irish and UK student behaviour in a credit led environment Deirdre O’Loughlin Department of Management and Marketing, Kemmy Business School, University of Limerick, Limerick, Ireland, and Isabelle Szmigin Birmingham Business School, The University of Birmingham, Birmingham, UK Abstract Purpose – This research seeks to explore current attitudes, motivations and behaviours in relation to student credit and debt consumption in the UK and Ireland. Design/methodology/approach – Key qualitative consumer research based on 20 interviews with Irish and UK higher education students is presented. Findings – The findings highlight that, while the UK and Irish student contexts are significantly different in terms of accommodation costs, tuition fees and living expenses, many Irish students reported relatively high debt levels, with some exceeding their UK counterparts. The research identifies key contextual factors associated with the credit-friendly environment in which students live in addition to shedding light on student orientation towards credit and debt, with specific conclusions for future student debt. Research limitations/ implications – Given the rise in debt and its detrimental consequences, the study has far-reaching implications for policy makers, consumer agencies financial providers and marketers in terms of creating an environment where good student financial capability and management is developed and facilitated through increased financial education and regulation. The research has implications for other western countries in terms of predicting comparative trends in student credit and debt attitude and behaviour. Originality/value – This paper addresses the lack of analytical and academic commentary exploring the dynamics and nature of student credit and debt, particularly within an Irish context, in addition to providing a cross-cultural comparison between credit and debt consumption in Ireland, where debt is a relatively new phenomenon, and the UK, a country well-entrenched in debt. Keywords Debts, Credit, Students, Consumer behaviour, Ireland, United Kingdom Paper type Research paper An executive summary for managers and executive readers can be found at the end of this article. Introduction Except as a technical topic within economics or finance, credit is a much-neglected issue in the social sciences (Burton et al., 2004). This lack of academic attention is particularly crucial considering the dramatic increase in access to and use of credit in western societies, particularly in the UK and more recently in Ireland, which has been accompanied by an overall growth in indebtedness evident in all sectors of society (Burton et al., 2004; Irish Banking Federation, 2005). The rise in both secured and unsecured lending has led to an increased concern over the high level of personal debt, with the Irish Central Bank estimating the level of personal credit outstanding at the end of 2004 at e85 billion, which is almost six times that of ten years ago (Central Bank, 2004; Murphy, 2005). In the UK, 40-50 per cent of households and 34 per cent of individuals have some kind of unsecured (non-mortgaged) debt which is not paid off in full at the end of the month (Oxera, 2004). The average unsecured debt in the UK is e5,200 as compared with Ireland’s figure of e7,100. Despite the subtle differences in statistics, consumer debt in England continues to soar with “bumper” figures reported for credit cards and personal loans (British Bankers’ Association, 2004). Students may represent a particularly vulnerable group in terms of overall financial literacy and capability in relation to credit and debt (Braunsberger et al., 2004; Rivard, 2002). A major problem for students in the market for credit is simply understanding the information that is provided and making informed, appropriate and mature decisions (Warwick and Mansfield, 2000; Financial Services Authority, 2005). In addition to the increased access to credit offered, financial institutions have intensified their marketing activity (Christie et al., 2001; Kempson, 2002), often targeting vulnerable customers, who may not have the same range of choices as higher-income customers. In light of these recent supply- and consumer-side dynamics, this paper explores current attitudes and behaviours in respect to credit and debt and the role and meaning they play in the context of young people’s consumption lives. In doing so, the research aims to address the lack of research into student credit and debt, particularly in Ireland, in addition to providing a comparative analysis of credit and debt consumption within the somewhat different contexts of Ireland and the UK, which has implications for other similar western economies. The current issue and full text archive of this journal is available at www.emeraldinsight.com/0736-3761.htm Journal of Consumer Marketing 23/6 (2006) 335–343 q Emerald Group Publishing Limited [ISSN 0736-3761] [DOI 10.1108/07363760610701878] 335