The Use of Alternative Financial Services (AFS): A Social Cognitive Approach

Abstract Grounded in Social Cognitive Theory (SCT), this study examines how the interplay among cognitive, behavioral, and environmental factors influences an individual’s decision to use AFS. Analyzing the cognitive construct, the current study concludes that while subjective financial literacy has a positive association with AFS use, objective financial literacy has a negative association with AFS use. When examining the environmental construct, financial hardship is positively associated with AFS use, whereas the behavioral construct, responsible credit card behavior, has a negative association with AFS use. Lastly, this study provides evidence that financial hardship moderates the relationship between financial literacy and AFS use.