International Journal of Social Sciences Vol. III (4), 2014 75 Bank credit card usage behavior of individuals; are credit cards considered as status symbols or are they really threats to consumers´ budgets? A field study from Eskisehir, Turkey Celil Koparal Nuri Çalık Celil Koparal (Prof. Dr.) Anadolu University Faculty of Economics and Administrative Sciences Department of Business Administration Yunus Emre Campus 26470 Eskişehir/TURKEY Phone: ++90 2223350580-2101 Fax: ++90 2223350595 E-mail: [email protected]Nuri Çalık (Prof. Dr.) Anadolu University Faculty of Economics and Administrative Sciences Department of Business Administration Yunus Emre Campus 26470 Eskişehir/TURKEY Phone: ++90 2223350580-3335 Fax: ++90 2223350595 E-mail: [email protected]Abstract This survey intends to find out the “bank credit card usage behavior” of the consumers where store and other loyalty cards are excluded from this survey. A survey is applied to 916 respondents selected via stratified sampling of which 880 are found eligible to be analyzed; Eskişehir is a city of Turkey with 700.000 inhabitants. The respondents are required to answer 45 questions of which first eight are of descriptive type on nominal scale and the last five are related to demographic characteristics of these respondents. The rest 32 are statements which are designed to reflect the credit card usage behavior of these people. The study consists of five parts. The first part is an introduction where the history of credit cards in Turkey together with the scope and the purpose of the study are concisely stated. The second part relates to the theoretical background of the subject matter and the prior researches carried out so far. The third part deals with research methodology, basic premises and hypotheses attached to these premises. Research model and analyses take place in this section. Theoretical framework is built and a variable name is assigned to each of the question asked or proposition forwarded to the respondents of this survey. 32 statements or propositions given to the respondents are placed on a five-point Likert scale where 1 represents strongly disagree; 2 disagree; 3 neither agree nor disagree; 4 agree and 5 strongly agree. The last five questions about demographic traits as age, gender, occupation, educational level and monthly income are placed either on a nominal or ratio scale with respect to the nature of the trait. Six research hypotheses are formulated in this section. The fourth part mainly deals with the results of the hypothesis tests and a factor analysis is applied to the data on hand. Here exploratory factor analysis reduces 32 variables to eight basic components. KMO test of sampling adequacy and scale reliability test proved high scores as 0.891 and 0.696 respectively. In addition non-parametric biraviate analysis in terms of Chi-Square test is applied to test the hypotheses formulated in this respect. The fifth part is the conclusion where findings of this survey are listed. Key words: Self-esteem, default on loans, compulsive buying behavior, price sensitivity, excessive card usage
23
Embed
BANK CREDIT CARD USAGE BEHAVIOR OF INDIVIDUALS … · Bank credit card usage behavior of individuals; are credit cards ... from which the user can borrow money for payment to a merchant
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
International Journal of Social Sciences Vol. III (4), 2014
75
Bank credit card usage behavior of individuals; are credit cards
considered as status symbols or are they really threats to
consumers´ budgets? A field study from Eskisehir, Turkey
Celil Koparal
Nuri Çalık
Celil Koparal (Prof. Dr.)
Anadolu University Faculty of Economics and Administrative Sciences
The above four tables reveal that there is a great gap between these two countries (USA
and Turkey in terms of credit card number (usage) and the volume of purchases (1245
million to 37 million and $1944 billion to $1366 million. Even when the population of
these two countries is used as weight factors (317 million vs. 76 million) this gap doesn’t
even close at per capita level.
After giving preliminary information about credit cards, it is time to return the purpose of
this study which is to ‘find out the consumer credit carol usage behavior in terms of their
demographic and psycho-graphic traits’.
2. Theoretical Background and Prior Research
2.1 Compulsive Buying Behavior and Credit Card Usage
Compulsive buying behavior is a form of buying which is still confused with impulse
buying although these two are quite different concepts. The major difference between
them as follows: “Impulsive buying is motivated by an external trigger such as a product
near the cash register. Compulsive buying is motivated by an internal trigger such as
stress or anxiety, and shopping and spending is an escape from the internal trigger.
Compulsive buying can develop into addictive buying when it become s a need to
continuously spend in order to alleviate stress and anxiety” (Johnson and Attman, p.394).
Another definition of compulsive buying is given by Michael R. Solomon: “Compulsive
consumption is the process of repetitive, often excessive shopping used to relieve tension,
anxiety, depression, or boredom”.
A number of psychographic attributes can be assigned to those consumer who frequently
succumb to compulsive buying as, low self-esteem, depression, anxiety, materialism,
excitement seeking, impulsiveness, and low emotional stability/high neuroticism (Johnson
and Attman, p. 395) Compulsive buying behavior, generally thought to be a chronic tendency
to spend beyond one’s needs and means. Credit card usage is suggested as a moderating
International Journal of Social Sciences Vol. III (4), 2014
79
variable between money attitudes (power, distrust and anxiety as independent variables)
and compulsive buying behavior (dependent variable (Robents and Jones, 216).
Fig 1. Relationship Between Money Attitudes and Compulsive Buying
Distrust
Power
Credit Card
Usage
Anxiety
Compulsive
Buying
Credit card misuse on the other hand plays the same role (moderating variable) between
consumer psychological traits as self-esteem, power prestige and risk taking and
compulsive buying (Palan et. Al., p. 82):
Fig 2. Relationship Between Psychological Traits and Compulsive Buying
Power Prestige
Self-Esteem
Credit Card
Misuse
Risk-Taking
Compulsive
Buying
2.2 Store and Debit Cards as complimentaries of Credit Cards
Store issued credit cards function as an alternative payment and financing medium.
Researches based on 1998 Survey of Consumer Finances revealed that credit availability
through bankcards is negatively correlated with consumers’ use of store cards as a
International Journal of Social Sciences Vol. III (4), 2014
80
financing medium (Lee and Kwon, p. 239). According to the survey of Consumer Finances in
1998, 68 % of American families have credit cards and half of the families have store
cards. The main difference between the credit and store cards is that store cards could
only be used at locations affiliated with the issuer of the cards. For practical reasons store
cards are also classified under the broad definition of credit cards together with bankcards.
Debit cards defined by Foscht et al is as follows (Foscht et al, p. 154): “Debit cards, on the other
hand, are a form of payment that requires that the buyer has the funds (or a line of credit
attached to the account) in his/her account before a purchase transaction is consummated.
The chief advantage of using a debit card is that it is a cashless way of paying cash for a
product or service. The immediate deduction of the payment amount from the account
also ensures that the customer does not spend more than what he/she has in his/her
account. However, a service fee may be levied by the financial institution processing the
debit transaction”.
An empirical study carried on 114 credit card holders in Dubai revealed that “the loyalty
behavior of credit card holders was influenced by perceived service quality and perceived
value, which in turn were influenced by involvement. Credit card firms therefore need to
devote adequate attention to their customers as well as delivering them prompt service,
because these quality determinants have both a high direct effect on loyalty in addition to
an equivalent indirect effect mediated by value. At the same time, given the strong direct
perceived value-loyalty linkage, credit card issuers should ensure that their value
proposition, in terms of cash value equivalence, convenience of use, and benefits
associated with the frequent use of the cards are appealing to their customers. This should
not restrain credit card suppliers from using premium pricing strategies for their services,
but it implies that the benefits that customers get in return should be seen as offsetting the
costs for them”. (Parahoo, p.12)
2.3 Credit Cards and Perceived Risk
Because of uncertainty, consumers want to manage their risk in exchanges. As said Bienstock
(2002), customers use information to increase certainty and lower the risk. Similarly, Mitra,
Reiss and Capella (1999) stated that perceived risk is used as a variable to explain the risk
perception. Murray (1991) expressed the greater the degree of perceived risk in a pre-
purchase context, the greater the consumer propensity to seek information about the product.
In the marketing literature, Jacopy and Kaplan’s risk definition and classification used widely.
Especially, they have some researches about perceived risk. (Jacoby and Kaplan, 1972;
Kaplan et al., 1974). According to them, perceived risk has been operational zed by five
specific risk types (Jacoby and Kaplan, 1972; Kaplan et al., 1974). Five different risk
dimensions identified are these (Jacoby and Kaplan, 1972):
Financial (monetary);
Performance (functional);
physical;
social; and
psychological risk
However the sixth important risk parameter is also identified as the time risk (Mitra, Reiss
and Capella , 1999). Time risk involves the possible loss of convenience or time associated
with the satisfactory delivery of a service according to Mitra, Reiss and Capella, (1999).
“The major types of risk (Schiffman , L . G . and Kanuk, P.76) that consumers may perceive when
making product purchase decisions include functional risk (risk that the product will not
perform as expected), physical risk (risk to self and to others that the product may pose), fi
International Journal of Social Sciences Vol. III (4), 2014
81
nancial risk (risk that the product will not be worth its cost), social risk (risk that a poor
product choice may result in social embarrassment), psychological risk (risk that a poor
product choice will bruise the consumer ’ s ego) and time risk (risk that the time spent in
product search may be wasted if the product does not perform as expected). Perceived risk is
considered a consumer characteristic as well as a product characteristic as it may be due to
various factors either associated with personal or product features. (Turley , L . W . and LeBlanc ,
R . P . PP.11-18) Another research is carried on the moderating influence of multi-item-list of
value on credit card attributes, age, and gender in credit use among Indian customers (Goyal,
p. 332”.
3. Research Model and Hypotheses
This field research was conducted in May 2013 applied to 916 respondents selected via
stratified sampling of which 880 are found eligible to be analyzed, Eskişehir is a city of
Turkey with 700.000 inhabitants. The respondents are required to answer 45 questions of
which first eight are of descriptive type on nominal scale and the last five are related to
demographic characteristics of these respondents. The rest 32 are statements which are
designed to reflect the credit card usage behavior of these people. All 45 answers
(statements) are transformed into variables as in the following table:
Table 1. Variables and Their Explanations
Variable Explanation Mean SD
NOOFCARD Number of credit cards that you actively use 1.80 0.92 USEPERIO How long have you been using credit cards? 2.53 0.76 TOTALNUM What is the total limit for your credit card(s)? 2.54 1.39 MOSTPRAC What is your most common practice in using credit
cards?
1.41 0.80
PRODGROU Which of the following product groups or service types
that you spend most with your credit cards?
3.04 2.56
SECURITY Apart from user name and password (mobile password)
what type of security tools do you use while shopping
online:
3.75 1.40
COMPLAIN When you have a complaint about your credit card,
whom do you usually appeal?
2.95 1.30
CANCELLE If one or more of your credit cards are canceled in the
last two years, what is the main reason of this?
3.46 1,51
MAXLIMIT I like to use the maximum limit of my credit cards. 2.38 0.82 FULLPAYM I always pay off my credit card debt fully and timely. 1.83 1.39 AGITATED When payment date of my credit card(s) approaches, I
often get agitated.
2.40 1,30
NOCAREPR I don't care much about the price of a product when I use
my credit card(s).
3.87 1.18
SPENDMOR Using credit cards drive me to spend more. 2.67 1.28 AVOIDDEF I always avoid default on my loans of my credit card(s). 2.13 1.20 UNDERLIM I never go beyond my credit card(s) limit(s). 3.01 1.33 PRESTIGE I consider credit cards as a sign of prestige. 2.99 1.11 PREFCRCA I prefer credit cards, because they offer payment in
installments without charging interest.
3.90 1.20
International Journal of Social Sciences Vol. III (4), 2014
82
FEELSECU I feel fully secure when I shop online with a credit card. 2.26 1.20 CONTREXP It is more difficult to control expenditures with credit-
card payment.
4,01 1.01
BUDGETLI My budget limits me from over-spending even if I use
my credit cards.
2.53 1.25
SIGNMODE I consider credit card usage as a sign of modernity. 3.35 1.19 CARELESS I don't care much about the price of a product when I use
my credit card.
3.69 1.20
RECKLESS I consider myself a bit reckless in taking risks. 2.70 1.31 REASNBLI The banks charge reasonable interest rates on credit cards
(in case of default, partial payment, installment purchases
etc.).
2.18 1.202.
OVERSPEN Credit cards lead people to overspending. 2,57 1.80 ADVANTAG Paying with credit card is always more advantageous
than paying with cash
2.45 1.15
SELFCONF It gives me self-confidence to pay with credit card when
I'm abroad.
3.71 1.11
EXCESSCA I believe that I have excessive credit cards. 3.28 1.13 NOMEMBRF I cancel the credit cards which require membership fees. 2.65 1.17 YEARNOLD I often yearn for the old days without credit cards. 1.96 1.14 FREEEXCS Credit card usage gives me the freedom of excess
spending.
.360 1.26
INTRSTIN I am more interested in the amount of money people
have, rather than their success in their occupations.
2.39 1.12
IMPRESSO I often purchase things to impress the other people. 2.80 1.22 DREADEXC My habit of excess credit card usage often frightens my
family members.
1.79 1.06
LESSATTN I pay less attention to security when excitement and
adventure are under consideration.
1.72 1.01
MINIMDEB I developed the habit of paying the minimum debt on my
credit card(s) bills.
2,44 1,27
FEELBETT Spending money makes me feel better. 2.17 1.19 COMPULSI Sometimes I lose my control and do purchases that I
cannot afford with my credit card.
2.28 1.30
ESTIMABL I feel myself as an estimable person or at least not
inferior than the other people.
2.72 1,23
IMPULSIV I often act impulsive when I do my purchases with credit
cards.
2.30 1.23
AGE Age ( ) 1) 18-25 2) 26-40 3) 41-62
4) 62+
2.91 1.04
GENDER Gender ( ) 1) Female 2) Male 1.69 0,45 OCCUPATI Occupation ( ) 1) Wage or Salary Earner 2)
Tradesman/businessman 3) Self-employed, professional
Jacob Jacoby and Leon B. Kaplan,"The Components of Perceived Risk", in SV -
Proceedings of the Third Annual Conference of the Association for Consumer Research, eds.
M. Venkatesan, Chicago, IL : Association for Consumer Research, 1972 Pages: 382-393.
Johnson, Tricia and Attman, Julianne, “Compulsive Buying in a Product Specific Context:
Clothing”, Journal of Fashion Marketing and Management, Vol. 13 No. 3, 2009
Kaplan, L.B., Szybillo, G.J. and Jacoby, J. “Components of Perceived Risk İn Product
Purchase: A Cross-Validation”, Journal of Applied Psychology, Vol. 59 No. 3, 1974,, pp.
287-91.
Khare Arpita, Khare Ansshuman, and Sing Shveta, “Factors Affecting Credit Card Use in
India”, APJML
24,2
Lee Jinkook and Kyoung-Naan Kwon, “Consumers’ Use of Credit Cards: Store Credit
Card Usage as an Alternative Payment and Financing Medium”, The Journal of
Consumer Affairs; Winter 2002; 36, 2
Mitra Kaushik, Reiss Michelle C., Capella Louis M, “An Examination of Perceived Risk,
Information Search and Behavioral Intentions in Search, Experience And Credence
Services”, The Journal Of Servıces Marketıng, Vol. 13 No. 3, 199, 9 pp. 208-228
Murray K.B., (1991), “A Test Of Services Marketing Theory: Consumer Information
Acquisition Activities”, Journal of Marketing, Vol.55, pp.1q0-25
International Journal of Social Sciences Vol. III (4), 2014
97
Palan M. Kay, Paula C. Morrow, Allan Trapp, II, and Virginia Blackburn, “Compulsive
Buying Behavior in College Students: The Mediating Role of Credit Card Misuse”, Journal of Marketing Theory and Practice, vol. 19, no. 1 (winter 2011),
Parahoo, Sanjai, K., “Credit Where it is Due: Drivers of Loyalty to Credit Cards”, IJBM,
30,1
Robents James A., and Jones Eli, “Money Attitudes, Credit Card Use, and Compulsive
Buying Among American College Students”, U.S. Census Bureau, Statistical Abstract of
the United States: 2012
Schiffman , L . G . and Kanuk , L . L . ‘ Consumer Behaviour ’ , Prentice-Hall of India, New
Delhi, 1997
Turley , L . W . and LeBlanc , R . P . ‘ An exploratory investigation of consumer decision
making in the service sector ’ , Journal of Services Marketing , Vol. 7 , No. 4 . 1993