Consumer Credit and Household Financial Vulnerability

With the opening up of China's financial market and the expansion of consumer credit scale, the problem of household financial vulnerability has become increasingly prominent, constantly impacting the financial stability of households and society. This study is based on panel data from the China Household Finance Survey (CHFS) in 2017 and 2019, and constructs a univariate linear regression model. Combining the panel data model and instrumental variable method, it empirically tests the impact mechanism and heterogeneity characteristics of consumer credit on household financial vulnerability. Research has found that consumer credit significantly exacerbates household financial vulnerability, mainly through two pathways of debt burden accumulation and venture capital expansion; Heterogeneity analysis shows that high human capital and high-income households are less negatively affected by consumer credit, while short-term credit can alleviate liquidity constraints, but the long-term debt spiral effect is significant. Research suggests that families should plan their credit use reasonably, financial institutions need to strengthen risk assessment, and the government should guide the healthy development of consumer credit to enhance household financial resilience.