Consumer behaviour in India with respect to credit card usage

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Thank You
Queries?