Financial Literacy, Trust, and Socioeconomic Determinants of Borrowers’ Behavior in Credit Card Use: A PLS-SEM Analysis

Credit cards play a central role in household financial behavior by combining payment and short-term financing functions shaped by socioeconomic, cognitive, and attitudinal factors. This study examines the determinants of credit card use and repayment behavior in Ecuador, focusing on purchasing power, financial literacy, and institutional trust. A quantitative, cross-sectional, and explanatory design was applied to a probabilistic sample of 550 credit card users from Quito and Santo Domingo. Multivariate analyses and Partial Least Squares Structural Equation Modeling (PLS-SEM)—including formative and hierarchical constructs—were used to validate the proposed behavioral framework. The results show that higher income is associated with more responsible repayment, while financial literacy and trust mediate this relationship through cognitive and attitudinal mechanisms. Moderate R2 values and small-to-moderate f2 effect sizes align with patterns observed in other Latin American credit markets. Behavioral differences also emerge across age, gender, and household composition, underscoring the heterogeneity of financial capability in the region. The findings demonstrate that responsible credit card indebtedness depends not only on economic capacity but also on financial knowledge and institutional trust, offering practical implications for financial inclusion policies and targeted education programs in emerging economies.