Impact of credit card usage on consumer

buying behavior
DONE BY : NOOR OSAMA ABY AL HOMOS
ID NUMBER :202115042
Subject : Global marketing
 Abstract
 The introduction of credit Card is undoubtedly indeed larger step in achieving the social objectives which is
expected from banking.
 It's treated as a standing symbol and as a vehicle of consumerism. But with increasing economic and financial
liberalization, the growing prosperity of urban class, banks feel it desirable to enter this line of business.
 Initially the Credit card was created to assist the purchasers for his or her local small purchases, later on,
Credit card has become predominant mode of shopping for goods and services.
 Within the present day world, the influence of credit cards, especially among the working party is widely felt
regardless of age, gender, legal status, sector and income. This, by and enormous have a bearing on the choice
making process of any consumer.
 Credit card wasn't a thing of person in previous days, thanks to the notion that, it's the part of upper crust or
high income group. But the growing consumerism broke all the notions and Credit card has become an
indispensable means to create any transactions, be it shopping or using in crisis. Credit card was identified as a
key area for investigation to see the influence, it's on buying behavior of consumers.
 With this in mind, the researcher commissioned quantitative and qualitative research to explore consumer's
understanding towards usage of credit cards, its influence on the determinants of shopping for behavior and its
impact on debt position and saving attitude followed by strategies for effective utilization of credit cards.
 The supply of easy and lots of credit product offerings to the consumers, aggravates the case. Hot cash there
makes a person to be more cautious while spending, but credit cards gives him the correct to spend
immediately, while he's spend conscious and thus his buying behavior is influenced by credit cards.
 Introduction
 Over the past three decades, credit cards have become increasingly available to households as credit card issuers
have extended credit to customer. This payment mechanism was an answer to the need to firstly have a more
flexible way to pay for an ever increasingly mobile population and secondly, to have a readily available form of
credit that appealed to American consumers (VISA, 2003).
 At a global level, VISA (2003) calculated a double-digit year-on-year compound growth since cards were first
issued. This remarkable growth has been possible thanks to the banks synergy in issuing cards and acquiring
merchants who are willing to accept a new payment instrument.
 The key enablers in connecting economic agents (i.e. cardholders, merchants and financial institutions) around the
world are the international payment circuits, the largest of which are Visa and MasterCard.
 A credit card is a type of credit facility, provided by banks that allow customers to borrow funds within a pre-
approved credit limit. It enables customers to make purchase transactions on goods and services. The credit card
limit is determined by the credit card issuer based on factors such as income and credit score, which also decides
the credit limit. 
 The credit card information includes credit card number, cardholder’s name, expiration date, signature, CVC
code, etc. The best part about a credit card is that it is not linked to a bank account. So, whenever you swipe
your credit card, the amount is deducted from your credit card limit, not your bank account. You can use it to pay
for food, clothes, take care of medical expenses, travel expenses, and other lifestyle products and emergency
services. 
 introduction
 Nevertheless, despite actual and ever growing importance of electronic
payments, few microeconomics studies are available in the field of payment
cards.
 What is needed is a microeconomic analysis aimed at understanding how
customers choose certain types of products. In doing so, one can begin to
understand how to increase market penetration in terms of new customers
and optimize the current portfolio.

 This research aims to analyses the demographic, socio-economic and banking-

specific determinants that influence the choice of credit card by bank
customer in Jordan , for example, over the past decade, the process of
banking concentration together with financial, technological and legislative
innovations has caused a profound transformation of the banking sector and
associated payment mechanisms.
LITERATURE REVIEW
 Benjamin Chan Yin Fah and Yeoh Sok Foon, (2011) investigated the purchasing behaviour of Malaysians and their
association with advertising appeals, tendency to spend, perceived social rank and materialism. The findings of the
study revealed that those respondents who are willing to spend money on perfume products have high level of
advertising appeals, perceive rank, materialism and moderate level of tendency to spend. The study found that
advertising appeals, tendency to spend, perceived rank and materialism influence respondent's purchasing behaviour to
spend for the perfume products. The study also found that, advertising appeals was important to influence consumer's
purchasing behaviour, thus marketer should target advertisement to push their perfume products.
 Rutherford et al., (2009) explored the factors influencing convenience use of credit cards, supported planned
behaviour. Convenience use of Credit card is identified as variable quantity, attitude with risk associated with debt,
late fee, etc, sources of knowledge, past payment behaviour, education and income were identified as variable
quantity. A sample of three, 476 households with a minimum of one Credit card was studied to look at the above
variables. The results showed significant relationship between independent and variable, representing attitudes, norms
and perceived behavioural control. Over 43.65% households were convenience users. On the full, convenience users
have less favourable attitude towards Credit card, risk, norms and behavioural control.
 Ratika Rastogi et al., (2012) examined the acquisition motivators so as to seek out out the factors influencing brand
preference and buying behaviour of rural consumers. The study was conducted among 160 households in country. Cross
tabulation results showed income, reasons and duration of designing before purchase are independent. Also gender
plays a dominant role in buying behaviour of durable goods. The study concluded that purchasing behaviour of rural
consumers especially in buying consumer goods (TV, washer, and refrigerator) is influenced by income of the
household, quality and price of the merchandise.
 Abu Bashar et al., (2012) analysed the association and relationship between demographic factors and impulse buying
behaviour. The study was conducted after having demographic variables as independent and impulse buying as variable
quantity. A sample of 250 was considered for the survey and was distributed questionnaires to analyse the factors
influencing impulse buying behaviour. The result showed positive but weak relationship between the variables, whereas
age and income showed significant relationship between the factors. It’s concluded that income and age than the other
factor like education or gender, are more likely to display impulsive buying behaviour .
 LITERATURE REVIEW
 Jayasree Krishnan, (2011) studied empirically to look at the association between the consumer's lifestyle and their consumption pattern.
Convenience sampling procedure with sample size of 711 was adopted. Three clusters categorized as purchase interested lifestyle
segment, family oriented segment and innovative lifestyle segment were identified to prove the hypotheses that buyers differ in
lifestyles are often grouped into segments. The result proved the hypothesis stated. The study concluded that lifestyle characteristics
have impact on purchase behavior also brand in elaborating lifestyle identity of a personal, which exhibits causal effect on consumption
behavior.
 Premavathy, (2008) analysed the influence of Credit card on customer's buying behavior with relevancy age, gender, qualification,
employment and income. A complete of 120 samples were drawn from population to check the numerous difference on customer's buying
behavior. The results showed positive effect towards influence of Credit card on customer's buying behavior but showed no significant
difference in influencing buying behavior with relevance age, gender, qualification, employment and income. The study concluded that
credit cards influences buying behavior by affecting saving tendency and by increasing unnecessary purchase which ends up in debt.
 Their findings suggested that main cards were used for having superior discounts and promotions; whereas subsidiary
cards were mostly held for ‘standby’ purposes. As a novel example, Scholnick et al. (2008) analysed Spanish bank data
containing more than 1000 observations on prices and quantities on ATM, credit and debit cards used at the POS.
Through an endogenous three-stage least squares, they assessed the substitution hypothesis between ATM and POS
transactions. Additionally, the higher the ATM cost surcharge for non-bank customers, the greater was the volume of
POS transactions.
  More recently, Zinman (2009) used the 1995–2004 Surveys of Consumer Finances and found that the pecuniary cost of
a marginal credit card charge is the key economic difference between debit and credit card. The main findings were
that revolving card holders are less likely to incur in credit card charges and highly more likely to use a debit card
conditional to several controls for socio-economic factors and tastes. Further empirical results suggested that debit
cards are becoming a stronger substitute for credit cards over time.
  From the present literature review, it emerges that empirical studies on credit cards are still relatively scarce and
are mainly concentrated on consumer data survey. Hence, the present study stands as a novel case as it provides new
evidence on the main factors affecting the choice of customers’ payment instruments, through the analysis of a large
data set of bank data at a microeconomic level.
Research problem
 Credit cards became indispensable for this day modem life style. People like
better to do shopping with credit cards instead of cash. Therefore, there's a
necessity to review the extent to which credit cards have influence over the
factors of shopping for behavior.
 The association of Credit card usage pattern with reference to demographic
variables on debt position and saving attitude of Credit card users, if analyzed,
adequately and appropriately, would result in devising various strategies for
effective utilization of credit cards, thus leading to reducing debt and promoting
saving attitude of Credit card users. Though many attempts are made in
studying buying behavior with different variables, this research attempts to
review buying behavior with regard to credit cards.
 This study aims to explore the buying behavior of Credit card users and to
research the usage pattern of Credit cards and its impact on debt position and
savings attitude of credit card users.
REASRCH objectives

 1. To study the Impact of Credit Card on Consumer Behavior.

 2. To Study that How to manage and Control the use of Credit Card.
 3. To study the Impact of Credit Card on Consumer Behavior on Jordanian
people
Research Methodology

 This research will present framework model, research hypotheses,

operational definitions of variables; methods used in the data collection and
applied measurements.
RESERARCH MODEL :

Consumer
Credit card
buying
usage
behavior

Independent variable Dependent variable

Process and activities people engage in
when searching for selecting, purchasing,
using, evaluating and disposing of products
and services so as to satisfy their needs and
desires”, (Belch and Belch, 2014).
Research Hypothesis

 H01: There are no significant association between demographic variables and

Credit card usage pattern of card user.
 H02: There are going to be no significant association between the category of
merchants where credit cards are used.
 H03: There are going to be no significant association between the credit card
usage and changing the buying consumer behavior.
Research Population and Sampling

 250 of the Jordanian people . Sample size of at least 200 to 500 is sufficient for data analysis.
 The sampling method in this study is a nonprobability and its technique is convenience
sampling which means to give the questionnaire to any available person.
 Data Collection Methods and Analysis
 This study is a quantitative research, which used a questionnaire survey to verify the
conceptual framework and hypotheses.
 Data was collected based on primary data through structured questionnaires on branding
awareness, brand recognition, brand preference, brand association and brand loyalty
distributed via hand to hand paper .
 Data analyses: All question answers given by respondents are analyzed as follow in different
parts.
 The time horizon of this study is Cross-sectional which means at this time and the SPSS was
used to analyze the data.
 Questionnaire

3 . which bank do you prefer ?

Arab bank atihad bank
Ajib bank bank qahira amman
A credit card can be defined as a payment instrument that may be used to purchase goods and services and,
where allowed by the issuer, to borrow money on credit for an extended period of time. Hence, with a credit
card, the cardholder can repay for the outstanding amount either at the end of the payment period (usually
monthly) or in instalments, thus spreading the payment over a series of billing cycles for which the bank usually
applies a fee and/or interest charges .
Questionnaire Development/Scale of
Measurement
 A significant majority of credit card users always use their credit cards mostly in
Travel industry (56.40%), and Hotels (44%). The results also indicate that people
were not willing to use their credit cards in Hospitals (52%), Apparels (10%). Results
also reveal that credit card users sometimes use their credit cards in petrol
stations (64%), and Departmental Stores (47.20%). Findings reveal that the study
have important implications because credit card companies are more interested in
credit card expenditure categories which will enable them to identify the potential
customers using credit cards. Based on this information credit card companies
develop new promotion programs for both retailers and financial service providers
in order to encourage credit card usage among consume$ Based on above result
both the Null hypothesis has been rejected as we can see that the use pattern of
credit card is different for different class of consumers as well as for different
category of merchants.
 
Discussion and Conclusions
 The study also aimed to identify the credit card factors that influence the
purchase behavior, as well as their relative importance with this regard.
 Advantages of having the best credit card After knowing what a credit card is, let
us find out the benefits that come with it. Depending on your needs, a credit card
comes with a host of features and benefits to save money while making
transactions. Here are the top benefits to help you to know more about credit
cards: 
 Hassle-free shopping experience
 No need to carry cash
 Rewards, cashback, and offers
 Widely accepted Meet emergencies
 Improves credit score
So, apply for a credit card to make your life convenient and manage your finances
easily.
 The researcher commissioned quantitative and qualitative research to explore consumer's
understanding towards usage of credit cards, its influence on the determinants of shopping for
behavior and its impact on Credit card debt and saving attitude of Credit card users and devised
strategies for effective utilization of credit cards. The inference of the study is that Credit card users
consider credit cards as status symbol; use them for cashless transaction with little vigilance,
expecting the Credit card issuing banks to waive off charges. Credit card users within the cohort 18 -
30 years, male, married, working in camera sector earning above $25,000 are more socially
influenced, having favorable attitude, with higher motivation, exhibiting addictive personality,
carrying better risk perception and are found to be defective decision makers who are less cautious
during the method of shopping for behavior.
 Credit card user's excessive spending and poor money management are the explanations for Credit
card debt which affects their saving attitude. Few consideration is required to be by Credit card
issuers like Banks may approach the target customers within the age bracket 18 - 30 years, male,
married, working in camera sector having an income of $50,000 and above to market their credit
cards. Same as Banks can rise credit period and reduce interest rates charged to credit cards to boost
better usage of credit cards. Banks may afford offers and discounts on vacations, tours, holiday
destinations through advertisements to use Credit cards where the members of the family and friends
of Credit card users can influence credit card users' Buying behaviour. Same as Credit card users shall
also consider like Minimum payment shouldn't be continued monthly. At one point, payment should be
made at one slot so debt won't accrue every month.
FUTURE RESEARCH

 The findings might not be very suitable as having customer with different
background such us, educational background or level of status .
 Choose one bank and make a study on the usage of its card on purchases .
 Also, future study should focus on a larger sample size.
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Thanks for listening
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