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Credit Card Usage Study

Consumer behaviour in India with respect to credit card usage

Credit Card Usage Study

  1. 1. Credit Card Usage Study Consumer Behaviour Project Kedar Tammana (221063), Mahesh Painuly (221068), Nehal Khetan (221076), Preety Rateria (221097), Rahul Chhabra (221106), Nandhagopal Muralithar (07335)
  2. 2. Introduction Objectives Data Collection Analysis Conclusion The Indian Credit Card Industry Market Share 2013-14* 5.13, 27% 3.09, 17% 4.01, 21% 2.76, 15% 1.31, 7% 2.4, 13% HDFC ICICI SBI Citigroup Axis Others First credit card introduced in the world 1950 1960 1980 2008 Diner’s club card introduced in India Source: NDTV India Market Watch Report 2014, RBI Credit Study 2013 *All values in Million units of credit cards Central Bank of India issues first credit card Focus change from acquisition to consolidation What’s a credit Card? Issuer Revolving User Account Merchant Grants line of credit Borrows to pay merchant Pays back balance with interest Industry Growth Rate Units sold: 4% Spending Amount: 32% CREDIT OUTSTANDING AMOUNT 30,047 22,635 18,908 19,611 24,700 40,000 30,000 20,000 10,000 0 Crore Rupees 2008 2009 2010 2011 2012
  3. 3. Introduction Objectives Data Collection Analysis Conclusion Credit Card Usage Study Objectives of the study Compulsive Buying Materialism Demographic Personality Traits Credit Card Spending Pattern Data Collection Secondary Data: Literature Review Primary Data: Non probability Sampling based Survey Compulsive Buying Materialism Demographics Personality Traits  Irresistible urge to buy  Loss of control  No regard for negative consequences  Excessive desire to acquire material goods  Valuing social status  Joy through spending Addictive consumption Commodity fetishism Age, Gender Marital Status, Dependents Education, Income level Introversion Agreeableness Conscientiousness Emotional Stability
  4. 4. Introduction Objectives Responses Collected Data Collection Analysis Conclusion Responses collected 132 Valid Responses 24 Invalid Responses Validity Test:  At least 1 year usage of credit cards 39% 61% Gender Female Male
  5. 5. Introduction Objectives Data Collection Analysis Conclusion Association of Demographics on Usage Pattern Balance Payment I don’t carry balance 1 – 3 Months 4 – 6 Months 7 – 12 Months 12 – 24 Months I always carry balance Grand Total Age Below 18 - - - - - - - 18 – 24 63 12 3 - - 6 84 24 – 30 27 6 - - - 3 36 30 – 40 - - - - - - - 40 – 50 3 - - - - - 3 50 – 60 3 - - 3 - - 6 More than 60 3 - - - - - 3 Grand Total 99 18 3 3 - 9 132 Age vs Balance Payment  Majority of non balance holders came from the youth, but this was owing to the fact that a majority of the youth are part of sample  There is no correlation between age and balance carriage Credit Limit Upto Rs. 10,000 Rs. 10,000 to 20,000 Rs. 20,000 to 50,000 Rs. 50,000 to 1,10,00 0 More than Rs. 1,10,00 0 Grand Total Income Level 0 - 2 LPA 6 6 - - - 12 2 - 4 LPA 9 3 - - - 12 4 - 6 LPA 12 - 6 9 - 36 6 - 9 LPA 6 3 3 3 6 21 9 - 12 LPA - 6 6 - 6 18 12 - 20 LPA 6 6 3 9 6 30 20 - 50 LPA 3 - 6 - - 9 50 LPA and - - - 3 - 3 above Grand Total 42 24 24 24 18 132 Income level vs Credit limit  The higher the income, the more credit limit was given  There is a positive correlation between income level and credit limit
  6. 6. Introduction Objectives Data Collection Analysis Conclusion Association of Demographics on Usage Pattern  Significance value < 0.05  We reject null hypothesis  Association between income group and credit card usage  High income group avail credit more frequently  Low income group use credit for small amounts  If Age <=30, more likely to use credit card for purchase  Significance value > 0.05  Null hypothesis accepted  No association between age and credit card usage  Significance value > 0.05  Null hypothesis accepted  No association between gender and credit card usage  Survey shows men use credit more often  Significance value < 0.05  We reject null hypothesis  Association between marital status and credit card usage  Single people use credit more often  Financial security possible explanation
  7. 7. Introduction Objectives Data Collection Analysis Conclusion Association of Materialism on Compulsive Buying 25% 43% 32% Materialism High Medium Low Correlation between Materialism and Compulsive Buying: 0.131787 Inference: Low positive correlation indicates very weak or non existent association between compulsive buying and materialism Compulsive buying 18% 27% 55% High Medium Low
  8. 8. Introduction Objectives Data Collection Analysis Conclusion Association of Personality Traits on Compulsive Buying 20% 39% 41% Introversion High Medium Low Emotional Stability 30% 45% 25% High Medium Low Agreeableness 27% 18% 55% High Medium Low Conscienciousness 32% 36% 32% High Medium Low Introversion Mean Score: 18.11364 Standard Deviation:3.980609 Agreeableness Mean Score:19.02273 Standard Deviation:2.156 Emotional Stability Mean Score:19.02273 Standard Deviation:2.906864 Conscientiousness Mean Score:18.68182 Standard Deviation:2.502056 Correlation: 0.181915 Inference: Weak positive correlation indicates no association between introversion and compulsive buying behaviour Correlation: -0.198285033 Inference: Weak negative correlation indicates there may be no relationship between conscientiousness and compulsive buying behaviour Correlation: -0.242245269 Inference: Negative correlation Correlation: -0.30238978 Inference: Negative correlation indicates that less agreeable people often are compulsive buyers
  9. 9. Introduction Objectives Data Collection Analysis Conclusion Association of Credit Card Usage Pattern on Compulsive Buying S. No. Questions Asked Mean Score Standard Deviation Remarks Shown 1. Does using Credit cards make you spend more? 3.96 1.12 Agree 2. Does using credit cards provide you the Financial Freedom? 3.17 1.011 Neutral 3. Does using credit cards save you a lot of time from being wasted? 4.16 1.18 Agree 4. Are credit cards more convenient and easy to use than carrying cash? 4.78 1.17 Strongly Agree 5. Credit cards come with additional offers and paybacks? 3.45 1.59 Neutral 6. Is credit card a status symbol for you? 2.48 0.93 Disagree 7. Are credit cards safer to use than carrying cash in your wallet? 4.29 1.10 Agree  Ease and convenience – cashless shopping  Benefits of credit card shopping  Tendency to buy more than necessary  Credit cards are not status Symbols  Saves time  Late payment is an added benefit
  10. 10. Introduction Objectives Data Collection Analysis Conclusion Conclusions and Limitations Conclusions Limitations Materialism Demographics Introversion Emotional Stability Conscientiousness Spending Style Compulsive Buying Agreeableness • Slightly materialistic • Low income  Small credit purchase • Youth use more credit cards • Neuroticism linked to compulsive buying • No correlation with compulsive buying • People shop more when happy • Not many people shop when anxious • Spend according to monthly budget • Check hidden costs and schemes • Convenience and ease • Safety • Not a status symbol • More prevalent with lower cost products • Seen only infrequently • Negative correlation with compulsive buying • No link to materialism  Survey conducted in Delhi (Location Bias)  Non probabilistic sampling (Subjectiveness)  Secondary data and literature review from US (Distance/Culture Difference)  Small sample size (May not reflect views of the population
  11. 11. Thank You Queries?

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Consumer behaviour in India with respect to credit card usage

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