Table of Contents

  • This research report is a joint Nordic contribution to add understanding about young consumers’ credit based lifestyles and payment problems and, to provide insights and suggestions for policy actions in order to find solutions and preventive mechanisms to the credit problems of the Nordic youth. It is also an implication of a fruitful research collaboration between Nordic research institutions supported by the Nordic Council of Ministers.

  • This study focuses on the credit-based lifestyle of young consumers and its relation to their payment problems. Further, it investigates the reasons for and ways of coping with these difficulties, and the views of young debtors concerning their own responsibility and that of other pertinent actors with respect to their indebtedness.

  • The credit society began to gain a stronger foothold in the Nordic countries during the 1980s and 1990s (e.g. Poppe 1999; Muttilainen 2002; see also Ritzer 1995). Financial markets were liberated toward the end of the 1980s, and the credit pressure that had been established during market regulation grew more intense. Credit use among Nordic consumers, thus, was stimulated by the liberation of financial markets together with the introduction of new forms of consumer credit, and further by increasing well-being, growth of consumption, more leisure time and a higher level of income. All of these also contributed to emerging credit problems. Credit use transformed from something morally objectionable to an ordinary everyday practice. Credits began to grow into an integral part of the household economy, often for a whole lifetime. In sum, this development was the result of two key factors: the deregulation of financial markets and an extended possibility to be discharged of one’s debts (Muttilainen 2002, 70-83). Consumers’ credit practices changed in the course of the 1980s, leading to uncontrolled . By the end of the 1990s, debt problems had become a permanent element of the modern credit market, quite independently of the simultaneous economic recession (see e.g. Poppe 1999; Mutilainen 2002).

  • Based on previous research on the multifaceted nature of consumption and credit use and potential payment problems (Leskinen 1990), this study is based on the preconception that payment problems are not caused by any single factor but by the overall lifestyle of consumers. Additionally, different personal and societal circumstances affect this development.

  • The connection between payment problems and lifestyles or life situations is not a clear cause-and-effect relationship. It is more a question of multi-dimensional factors, situations and events entangled into a complex totality (e.g. Leskinen 1990). The credit phenomenon has methodological implications as well. Thus, in order to understand the complexity of young consumers’ credit-based lifestyles and payment problems, we apply a holistic, interpretative approach in this study. Such an approach helps us to understand the multifaceted nature of consumer credit, the complex conditions of credit use and the multiple dimensions of human behaviour. The emphasis here is on the totality of lifestyle factors: the impact of values (credit use and consumption), practices and activities (consumption and credit use) and structural factors (objective conditions and available resources) on credit use and payment problems (Leskinen 1990).

  • The study materials were gathered by interviewing young people who had run into problems as a result of credit use. The interviewees were aged 18-30 years and represented four Nordic countries: Denmark, Finland, Iceland and Norway. According to the original plan, 12 young consumers from each country were to be invited for interviews during spring 2003. This did not work out as anticipated, however, and so the final data comprise 28 interviews: 5 from Denmark, 6 from Finland, 12 from Iceland and 5 from Norway. Recruitment of interviewees for this study proved very difficult despite the fact that they were sought in many different ways. Iceland was the only country which managed to assemble the intended number of study participants. Our research team had planned beforehand where and how to look for interviewees for the study, but when this plan failed to bring results, the researchers in each country applied whatever means they deemed best to reach young consumers with payment problems. The data were collected from each country in the native tongue of the interviewees, and the interviews were transcribed word for word. The materials from Iceland, Denmark and Norway were then translated into English, the Danish and Norwegian data by the respective researchers who had made the interviews. The Finnish data have so far not be translated into English except for the quotations presented in this report.

  • Consumption forms an inseparable part of everyday life. It refers both to meeting one’s basic needs as well as fulfilling one’s desires. Besides being a means of survival, it is also a way of positioning oneself in the community. More and more frequently, consumption means entertainment, a way of seeking variety or pleasure or rewarding oneself, as a counterbalance to hard work or studying. Young people are increasingly interested in consumption, because they have disposable income and because all kinds of fashionable brand items are marketed specifically to them. The influence of youth on consumption is far greater nowadays, both culturally and ideologically, than it was in the 1960s and 1970s. The youth culture of those days has transformed into today’s youthful lifestyles and consumption styles, which are considered the norm by the majority of the population (Wilska & Virtanen 2002, 102). The participants in this study were born in 1973-1984, so that they had grown into the consumer society at a time when these lifestyles and consumption styles were being shaped.

  • The interview material was approached from the perspective of young people’s consumption and credit use, their ways of settling debts and their attitudes to responsibility. By perusing and summing up the data we detected three different credit-based lifestyles. The young consumers representing the first lifestyle are here referred to as easy-living, pleasureseeking youth. The second group is characterized by a risk-investing and the third by a rambling lifestyle.

  • The objective of this study was to investigate the role of consumer credits and credit-based lifestyles in the everyday life of young consumers, the reasons for their payment problems and the views of these young concerning the division of responsibilities between the pertinent parties. The focus is on the way our young interviewees described their own lifestyle, credit use and responsibility. We used a type analysis to categorize the study participants into three different lifestyles or types, depending on the way they talked about their consumption and credit use prior to their debt problems. The lifestyles enabled us to detect the various dimensions of young people’s credit-based consumption. The interviewees’ views about their own responsibility were interpreted by examining the behaviour which reflected a sense of responsibility in the different lifestyle types. Responsibility will be discussed in more dept in a further study for which we will re-analyze the material of this study. Additional material will be collected from writings in the press and by interviews with grantors of credit.