A RESEARCH PROJECT REPORT

ON

“ANALYSIS OF CREDIT CARD USAGE

PATTERNS”

SESSION (2023-2024)

Submitted in partial fulfillment of the requirement for the

award of degree

of

BACHELOR OF COMMERECE

Submitted to: Submitted by:

Ms Jyoti Krishna Makkar

Asst. Professor Semester VI

Roll No: 21024035

i
 STUDENT’S DECLARATION

I_________________________________Roll No.___________________is a full-

time bona fide student of VI semester of Bachelor of Commerce (B. Com)

Programme at IFTM University, Moradabad. I hereby declare that this field project

work and its report submitted in partial fulfillment of the requirements of the

programme is an original work of mine under the guidance of the faculty mentor

__________________________.

I declare that is not based, copied or reproduced from any existing work of any

other person or on any earlier work undertaken at any other time or for any other

purpose, and has not been submitted anywhere else at any time.

Student's Signature

Date:

Faculty Mentor's Signature

Date:

ii
 ACKNOWLEDGEMENT

At the outset, I would like to thank the Almighty for the blessings, without which the

conceptualization and completion of this project was not possible. In the course of this

project, I got inspiration, ideas, support and suggestions from various people, and I will

remain highly indebted to them for it.

I express my sincere gratitude to Prof. (Dr.) Nisha Agarwal, Director, School of

Business Management, for providing me this opportunity to undertake the project tiled

“A STUDY OF _________________________________________________________”

I also extend my sincere appreciation to MS. JYOTI who provided his valuable

suggestions and precious time in accomplishing my project report.

I would also like to thank my parents for their moral support and my friends with whom I

shared my day-to-day experience and received lots of suggestions that helped me

improve the quality of this project work.

B.COM SEM

iii
 TABLE OF CONTENTS

Sr. No. CONTENTS Page No.

1. INTRODUCTION 1-7

2. REVIEW OF LITERATURE 3-5

3. OBJECTIVE OF THE STUDY 6-6

4. SCOPE OF THE STUDY 7-7

5. RESEARCH METHODOLOGY 8-9

6. DATA ANALYSIS 10-23

7. RESULTs AND FINDINGS 24-24

8. CONCLUSION 25-25

9. LIMITATIONS OF THE STUDY 26-26

10. SUGGESTIONS AND RECOMMENDATIONS 27-28

11. BIBLIOGRAPHY 29-30

iv
 CHAPTER- 1
INTRODUCTION
The purpose of this study was to identify the perception on the main factors that
contributed to credit card debt, mainly among working adult in Batswana. In the
modern context of society, economic growth and sustainability are considered the
main point of success in every respect. It is a desired state to be in, which is sought
from an individual level to a national level. This research is motivated by this very
fact, the need for growth and prosperity of a nation, which in this regard stems from
eradicating the current recession on all societal levels There is very limited academic
literature on developing nations‟ financial contribution to the world‟s economy.
Unlike many developed countries, there has been little evidence of research on the
factors influencing individual levels of debt due to use of credit cards. These factors
that contribute to credit card debt in developed nations have not been proven to
generalize to third world nations, like Botswana, which have completely dissimilar
cultures from those of the developed nations, and even have different practices on
cultivating their economic growth and stability.
Moreover, past research showed evidence of profound failure in the efforts of
developing nations to curb their national levels of debt as well as their citizens‟
individual levels of debt. This has been carried out through years and years of
research, even until the current financial crisis. Credit card debt has been studied
throughout many countries, majority of which are first world nations, and these studies
point out the fact that there has been a rise in credit card use because of its increased
popularity throughout the previous decades. Despite their popularity, researchers had
explained that excessive use of credit cards led to the potential to contribute to
elevated stress levels, potential job losses, bankruptcy, and even loss of family
members. Through this research, only can the true causes of personal debt among
developing societies be revealed. These factors can only be obtained by studying these
very nations to establish their patterns of credit behavior and practices. Nonetheless,
some studies show a similarity among credit card use among different nations. There
is room for further studies relating to perceived credit card usage and relative debt
among individuals from third world nations. These individuals portray different
behaviors when it comes to financial practices, from their savings practices and even
their spending behaviors. This study can provide the platform to understanding such

1
phenomenon, and provide more relevant solutions to the current problem. This
research can better describe the situation in the context of developing nations, which
can then be appropriately compared to developed nations. Throughout the research,
the main factor important to this study is the perceived individual factors that
contribute to credit card debt among society. From this, an overall understanding of
the debt pattern can be established and more importantly, an appropriate strategy can
be formulated to address the debt problem starting with an individual perspective to a
national perspective.
CONCEPTUAL FRAMEWORK
The concept of credit has existed for many centuries and despite this fact has only reached
magnitudes in recent decades. The credit card market has penetrated the society and even in
status quo continues to expand rapidly. The borrowing institutions have secured a stream of
infinite gain as more economies are shifting to the credit culture than maintaining the old
saving culture. Many factors contributed to the use of credit and credit cards due to the
advantages and conveniences of their use. However, there were detrimental effects associated
with such „culture‟ even though the loaning institutions do little or nothing to inform their
market about them. As such, many are lured into the credit stream and with little knowledge
and awareness coupled with living constraints and household needs, most of society has
fallen prey to the reliance on credit and poor management of finances in both household and
national levels. Therefore, in this research it consists of six independent variables and the
dependent variable is credit card debt. The next section includes the hypotheses development.
CONCEPTUAL FRAMEWORK OF THE CAUSES OF CREDIT
CARD DEBT

1. Financial
Wellbeing

2. Attitude towards
Credit

3. Financial
Literacy Credit Card
Debt
4. Financial
Confidence

5. Consumer
Spending

6. Interest Rate

Financial Wellbeing: Financial wellbeing is the inclination of households to

2
search for improvements in managing their economic resources as well as developing
plans for strengthening their future financial position (Prather, 1990).The financial
wellbeing of many households was described to be negatively affected by high debt
levels because of aggressive use of credit for consumption and by borrowing
disproportionately to earnings (Georgarakos, Lojschova, & Ward-Warmedinger, 2010).
An improved state in financial wellbeing was associated with lower household debt
whereby households felt comfortable with their household income, their credit card
and mortgage debt as well as ability to make regular bill payments.
High financial concerns or distress was described to be positively related to high debt
burdens as these financial burdens become cumulative. These included unpaid bills,
increasing credit card balances as well as receiving overdue notices from creditors
and collection agencies (Sorhaindo, Kim & Garman, 2006). Furthermore, higher
financial distress or poor financial wellbeing has been described to better explain the
rising household debt levels through established higher credit card debt to income ratio
(Drentea, 2000). Poor financial wellbeing was shown to have a positive relationship
with increasing debt levels whereby the financial pressures and discomforts
increased because debt accumulation increased beyond periods of obtaining and
repaying minimum credit card balances (Rao & Barber, 2005). Similarly, increasing
indebtedness from using credit and other forms of unsecured debt was considered
the main factor accounting for greater tendency to report debt problems (Del-Rio &
Young, 2005).
Attitude towards Credit: There are three forms of financial attitudes that can be
outlined as guidelines for categorizing consumers and households (Devaney, 2001).
An individual may have a tolerant attitude, risk averse attitude, and or risk seeking
attitude toward money and forms of credit. Furthermore, research revealed that
consumers may hold different spending and consumption behaviours which were all in
relation to the type of attitude they had and even these attitudes may change within
one individual (Davies & Lea et. al 1995). That is, a consumer who was tolerant to
debt may change and avoid such behaviour to become risk averse (Hayhoe et. al,
1999). On the other hand, researchers proved that another individual may start off by
avoiding risks associated with soliciting credit to having tolerance towards such
behaviours and practices that increase the chances of debt and or credit liabilities (Bell
et. al 2001). Most of those who tolerated risk were identified in previous research as

3
the youth and carried on with this form of financial attitude up to their middle life
(Boddington & Kemp, 1999). Such attitude left many of these young adults with
enormous credit card debts when they graduated from their higher learning
institutions while on the contrary, older consumers, such as retirees and those
reaching retirement age, had a negative attitude towards credit and debt due to the
need to save and secure funds for life after retirement. The economic conditions also
affected the attitudes of consumers towards risk profiles wherein most households
avoided risky investments and consumption behaviours during uncertain economic
periods as a result of lower confidence in the market and economy as a whole
(McKenna, Hyllegard, and Linder, 2003).
Financial Literacy: The ability to make sound saving choices and financial
decisions relies on the availability and exposure to financial education. Prior research
revealed a great relationship between levels of financial literacy and debt whereby the
less knowledgeable had a tendency to incur more debt than those who were financially
literate (Lusardi & Tufano, 2009). Having such literacy on financial concepts allowed
an individual to make better judgments on retirement planning, borrowing behaviour,
and participation in the stock market (Selejio, Onesimo, Mduma, & John, 2005). In
contrast, poor financial literacy exposed individuals to poor decisions on investments
and borrowing practices as well as saving behaviour (Worthington, 2006). There was
abundant and increasingly sophisticated financial instruments in the market which
many consumers had to choose from and with financial ignorance or lack of financial
knowledge, there was a greater degree of falling into financial indebtedness from
using such instruments like the credit card. Financial literacy can better improve
borrowing habits of consumers, their savings behaviour and overall better financial
decision making (Lusardi, 2008). Moreover, the link between financial literacy and
wellbeing entail that the financially literate have positive financial behaviours which
cushion them against heavy debt. They are better off since most literate consumers can
make simple interest compounding calculations to assess how much debt they may fall
into. Such knowledge allows the consumer to even plan for retirement than those who
are financially illiterate (0steen, 2007). With relevance to credit card debt, those who
are financially literate will be able to calculate the compound interest associated with
relying on their use unlike those on the other end of the literary spectrum who may not
be aware of the heavy interest charges associated with continuous reliance for

4
consumption expenditure on credit cards and failing to save for retirement as well as
contingency saving (Lusardi and Mitchell, 2007).
Financial Confidence: Financial confidence is a measure of the subjective
expectations of individuals towards the current and expected economic conditions
(Kershoff, 2000). This consumer confidence can be further extended to describe the
degree of confidence consumers feel about their personal financial state and
highlighted to determine the level of spending that consumers engage in (Investopedia,
2010). Evidence on influence of consumer confidence on debt level indicated that
consumer pessimism highly influences a slowdown in output whereby borrowing on
credit or spending on credit is reduced (Matsusaka & Sbordone, 2007). Furthermore,
there was qualitatively significant causal relationship established between consumer
confidence and future changes in household spending activities which could include
higher credit spending and higher credit borrowing patterns based on the optimism or
pessimism towards future personal financial positions (Howrey, 2001). High degrees
of financial confidence were seen to contribute to escalating financial vulnerability
from the increased availability of consumer debt by credit card institutions and
lowered borrowing rates from banks which in turn increased household spending
beyond income levels (Moseley, 2002). On the contrary, evidence of decreased
household debt was associated with lower financial confidence wherein consumers
focused on repaying their already existing high debt balances from bank loans as well
as monthly minimum repayments for credit cards (First National Bank, 2010). In
addition, as consumer confidence declined, the effect was proved to be an increase in
savings together with a decline in borrowing which in the end reduced the risks of
increased household debt (Pettinger, 2010). Unwillingness of banks and other credit
institutions to reduce the costs of borrowing reduced the consumer confidence in
future financial positions and in effect focused their extra income on saving than
spending which in effect reduced the levels of household debt associated with
repaying bank loans and credit card charges (Pettinger, 2010).
Consumer Spending: Consumer spending deals with household consumption of
goods and services that form their basket of necessities and wants for sustainment
(Yee & Ee, 2007). Consumer spending on consumption also forms a large part of
economic growth and in recent decades has increased, contributing to the increased
living standards of many households (Amoateng et. al 2002). Consequently, the lower

5
income bracket households have had major challenges in such economies though
increased inequalities and new risks. This was indicated to be largely due to the fact
that they also faced increased consumption needs for their households in contrast to
their low incomes (Feldstein et. al 2006). The rising consumption aspirations and
necessities had contributed to the high vulnerability to income changes and escalating
levels of household debt (Institute for Public Policy and Research, 2009). There was
an established constant relationship between credit card use, increased consumer
spending, borrowing and debt whereby there is a significant link between credit card
spending and consumer debt in contrast to credit card spending and credit card debt
(et. al Mann, 2006). The relationship between spending and credit availability was
further explained in which the forms of credit available were largely in the form of
credit cards. Consumer spending was indicated to fall (rise) with respect to the
increase (decrease) in credit availability. Large changes in consumer spending were
also linked to a greater need or significant importance in credit availability (Natoli,
2007). It was vital to consider credit availability when determining or forecasting
consumer spending in the sense that there was an established relationship between the
two whereby large changes in credit availability affected the consumption spending
decisions of households. The periods of the large changes in credit availability was
also proven to be largely associated with periods of high economic uncertainty
(Beaton, 2009).
Interest Rate: From a personal financial standpoint, the interest rate refers to the
monetary amount paid out whenever the individual borrows from an investor such as
the bank or credit company and this charge represents the cost of borrowing (Groves,
2010). In relation to unsecured debt such as credit card debt, the interest rate charge is
followed by the compounding interest which forms the additional interest charged on
the preexisting charge for using credit (Scottish Law Commission, 2005). Credit card
interest rates may be influenced to increase or decrease whenever the central bank
rates such as the Federal Fund Rate increases or declines (Carty, 2010). The interest
rates charged on credit card usages was found to be a contributor to household debt in
the sense that the actual amounts were hidden and fluctuated over time periods
(Greenspan ,2005). The lowered rate of interest charged on credit cards was proven to
influence a greater usage pattern of credit cards and in effect raising the level of
indebtedness among households (Dey, Djoudad & Terajima, 2008). As compared to

6
earlier generations, the recently lower repayment rates on credit cards fuelled the
heavy borrowing patterns among the young generation and resulted in a relatively
higher credit card debt burden which was suggested to have prolonged effects during
later life periods (Jiang, 2006). Furthermore, high interest rates were shown to add up
rapidly and as a result led to credit card trouble as making minimum payments became
difficult with the high credit card rates (Frost, 2010).When the demand for consumer
debt was high and there was a subsequent rise in interest rates, the level of household
debt was observed to rise due to additional monetary amounts required to cover the
increased costs of using credit cards (Kim, 2010). The compounding nature of interest
rates charged on credit card usage was also identified as an influencing factor towards
elevated debt levels (Marquit, 2008). The increase in interest charge as a penalty
charge for late credit card payment was described to influence the debt level of the
individual in that the finance charges increase and make it more expensive to carry a
balance (Simon, 2010).

7
 CHAPTER- 2
REVIEW OF LITERATURE
Current businesses face the challenge of a constantly evolving market where
customer‟s needs are changing rapidly. Some researches applied customer
demographic variables such as recently, frequency, and monetary (RFM) to analyze
customer behavior (Tsai and Chiu, 2004). Although RFM analysis can effectively
investigate customer values and segment markets, it is not a suitable tool for detect the
customer behavior changes. Therefore, to better understand customer behaviors,
developing suitable change detection models becomes an important research topic in
the financial business.
Except the studies of rule maintenance in the changed database, some researches focus
on discovering emerging patterns. Emerging pattern mining can be defined as the
process to discover significant changes or differences from one database to another
(Dong and Li, 1999). Emerging pattern captures emerging trends in time stamped
database. Another related research trend is subjective interestingness mining.
Interestingness mining is to find unexpected rules with respect to the user‟s existing
knowledge.
Subhani in 2008 conducted a study on „Plastic Money/Credit Cards Charisma for
Now and Then‟. The study was based to find out the charisma of plastic money, its
usability and affordability and its impact on its preference to use. The research found
that the preference to use of plastic money/ credit card has its pros and cons with its
usability and affordability.
According to the consumer behavior, plastic money is a form of conditioning and acts
as a stimulus which qualifies a consumer to spend. The study shows that the
preference to go for plastic money has a positive attitude that it is easy to use. The
perception of credit card usability is associated with a psychological phenomenon that
people are likely to spend less with credit card and spend more with the same amount
of cash on hand in the same budget and this precept also linked with the consumer
self-convenience.
Lowenstein and Hafalir in 2012 conducted a study on “The Impact of Credit Cards
on Spending”. The study focused on two types of customers: one who carry debts and
the one who do not carry debt. The one who carry debt are known as the Revolvers

8
and the one who do not carry debt are called the convenience users. The study
measured the impact of payment with credit card as compared to cash by an insurance
company employee spending on lunch in a cafeteria. It was found that there was
change in the payment medium of people from cash to a credit card when an incentive
to pay with a credit card was given. It was then found out that credit cards do not
increase spending. However, the use of credit cards has a differential impact on
spending for revolvers and convenience users. Revolvers spend less when induced to
spend with a credit card, whereas convenience users display the opposite behavior.
Jia Loke Yiing (2007) Review of network Economics, December, 6 (4). In his study
“Determinants of merchant participation in credit card payment scheme" aimed at
establishment of the determinants of merchant participation in credit card payment
schemes. It is also found that a merchants personal background, type of business and
total value of sale plays an important role in determining a merchants acceptance of
cards in making payments and it is also found that customer‟s usage of credit cards
and other merchants‟ acceptance of credit cards in payments have influenced a
merchant‟s choice significantly. Findings suggest that non-pecuniary strategic factors
are the strong drivers and barriers to a merchant‟s involvement in credit card payments
services as compared to the monetary factors.
P Manivannan (2013) in his research paper “Plastic Money a way for cash Less
Payment System” examined that Plastic Money i.e., usage of Credit card was
measured a luxury, and has become needed. These plastic money and electronic
payments were and used by only higher income group. This facility extended not only
to customers in urban areas or cities, but also to customers residing in rural area.
However, today, with development of banking and trading activity, the fixed income
group or salaried classes are also start using the plastic money and electronic payment
systems and particularly Credit cards.
Mandeep Kaur (2011), the study examines the point of view of credit card users as
well as member establishments towards the usage of plastic money. It focuses on some
important aspects in usage such as challenges experienced by customers and bankers,
value attribution to plastic money adaptation and some factors influencing them to use
plastic money. It also analyses the current position and trends of plastic money in
India.
Anupama Sharma (2012) in her research paper “Plastic card frauds and the
countermeasures: towards a safer payment mechanism” have thrown light on the

9
number of frauds increased considerably in the usage of plastic cards as in case of
plastic card frauds the most affected parties are the merchants of goods and services as
they have to bear the full liability for losses due to frauds, the banks also bears some
cost especially the indirect cost whereas the cardholders are least affected because of
limited consumer liability and concluded that all these losses can be dealt with by
making the prudent use of the new technology and taking the respective counter
measures.

10
 CHAPTER- 3
OBJECTIVE OF THE STUDY
This study is carried to achieve the following objectives-
1. To learn about different people who use credit cards and why.
2. To find out how often and for what reasons people swipe their credit cards.
3. To figure out if people pay their credit card bills all at once or just a bit at a
time.
4. To understand if people understand the rules and fees of credit cards.
5. To find out if using credit cards helps people reach their money goals or makes
it harder.

11
 CHAPTER- 4
SCOPE AND IMPORTANCE OF THE STUDY
Further future researchers may expand the scope of study to include relationships that
exist among variables of interest which were not mentioned in the scope of this
research. Future research should further expand the pool of the sample respondents in
order to obtain sufficient data for analysis. In addition, increasing the number of
respondents would be a contingency for unfilled or invalid questionnaires obtained
during collection and screening. The larger the distributed questionnaires, the better
the response rate which is vital for data analysis. In the future, researchers should also
consider the location of their studies. In order to improve the data collection process,
the location of study needs to have sufficient individuals to pick for sampling and
using different sampling styles like random sampling instead of convenience sampling
would allow for more accurate results.

12
 CHAPTER- 5
RESEARCH METHODOLOGY
Methodology refers to the technique used in the gathering of relevant data and keeping
of such record. This chapter intends to identify the various methods and procedures
used for this research. It includes the definition of population and target sample size,
data collection methods and description of data analysis procedures.
DATA COLLECTION METHOD
Data collection is an activity aimed at obtaining relevant information for decision
making. The researcher therefore opted to the use of both primary and secondary
method of data collection for this research.
QUESTIONNAIRE
This is a setoff simple direct and related question designed with spaces for answer
which are issued to respondents to require responses. The questionnaire is drawn in
two parts to consumers/customer and to the management staff. The design of the
questionnaire used are dichotomous, multiple choice and open ended types. The
adoption of the method is used based on the fact that it avoids emotional questions and
adequate information are provided to what is expected of the respondents.
SECONDARY DATA
These are data collected from already published text books, magazines, newspapers
and articles. This method usually covers a wide range of data; it does not always cost
much to obtain the data. The types use by the researcher is text books and lecturer
note.

13
 CHAPTER- 6
DATA ANALYSIS & INTERPRETATION
The basic objectives of data analysis were to get a feel for the data, to test the
goodness of the data, as well as testing the developed hypothesis. After checking the
central tendencies and dispersion, frequency distributions were obtained and displayed
in the form of histograms and charts through the use of SPSS (Statistical Package for
Social Science). The following object that required to be fulfilled was the goodness of
data through testing the reliability and validity of the measures. Reliability may be
explained as the consistency of measurement or the repeatability of one‟s
measurement. On the other hand, validity was previously explained as “best available
approximation to the truth or falsity of a given inference, proposition or conclusion"
(Cook and Campbell, et. al 1979).
DEMOGRAPHIC PROFILE
A total of 200 reliable respondents out of 310 distributed questionnaires were sent out
for research and the data analysis tests were carried out including descriptive analysis,
mean value of variables, reliability test, normality test, correlation analysis, regression
analysis, and finally analysis of variance (ANOVA).

Demographic Frequency Percentage Cumulative

Profile (%) Percentage
(%)

Gender
Male 83 41.5 41.5
Female 117 58.5 100.0

Age
20-25 years 21 10.5 10.5
26-30 years 59 29.5 40.0
31-35 years 45 22.5 62.5
36-40 years 25 12.5 75.0
41-45 years 14 7.0 82.0

14
 46-50 years 19 9.5 91.5
51-55 years 13 6.5 98.0
56 and above 4 2.0 100.0

Marital Status
Single 124 62.0 62.0
Married 72 36.0 98.0
Divorced 1 .5 98.5
Widowed 3 1.5 100.0

Income

Less than P5000 70 35.0 35.0

P5000-P9999 80 40.0 75.0
P10000-P14999 33 16.5 91.5
P15000-P19999 10 5.0 96.5
P20000-P24999 1 .5 97.0
P25000-P29999 5 2.5 99.5
P30000 and above 1 .5 100.0

Educational
background

Primary education 7 3.5 3.5

Secondary 27 13.5 17.0

education
Tertiary education 154 77.0 94.0

Vocational 10 5.0 99.0

institution

15
 Other 2 1.0 100.0

Employment
Status
Employed for 186 93.0 93.0
wages
Self Employed 2 1.0 94.0
Out of work and 7 3.5 97.5
seeking
employment
Part time worker 5 2.5 100.0
Never heard of 5 2.5 2.5
them
I am aware but I 86 43.0 45.5
have never used
them
Use it only 61 30.5 76.0
sometimes
Use it on a regular 48 24.0 100.0
basis

Most recent use

of credit cards
Never/Almost 92 46.0 46.0
never
6 months to 1 year 35 17.5 63.5
ago
1 month to 6 18 9.0 72.5
months ago
Under one month 32 16.0 88.5
ago
Last week 15 7.5 96.0

16
 Yesterday 8 4.0 100.0

Current debt
level
None 71 35.5 35.5
P1000-P3000 52 26.0 61.5
P3000-P5999 31 15.5 77.0
P6000-P8999 8 4.0 81.0
P9000-P11999 8 4.0 85.0
P12000 and above 30 15.0 100.0

Likelihood of
future usage
Very unlikely 61 30.5 30.5
Somewhat 12 6.0 36.5
unlikely
Not sure 66 33.0 69.5
Somewhat likely 20 10.0 79.5
Very likely 41 20.5 100.0

Number of credit
cards owned
None 102 51.0 51.0
1 credit card 83 41.5 92.5
2 credit cards 13 6.5 99.0
3 credit cards 2 1.0 100.0

Frequency of
credit card use
Never 103 51.5 51.5
At least once a 69 34.5 86.0
month
A few times a 25 12.5 98.5

17
 month
A few times a 3 1.5 100.0
week

Out of the 200 respondents from the survey the data was screened according to gender
to acquire the results of the respondents‟ opinions in relation to this attribute. The
majority of the respondents were female, making up a total of 117 and in percentage
figures 59% of the survey was answered by females while the remaining 41% of the
sample study was male. The dominating age group from the survey was the range
between 26-30 years. This was a total of 59 of all the respondents or 29% of the study.
The bulk of respondents in the survey were classified “single”.
The lower most represented members of the survey were the widowed. Seven
income groups were identified and the actual figures were presented in the figure. As
illustrated, the majority of respondents had an income level ranging between P5000-
P9999. This consisted of 80 out of the 200 respondents or 40% representation. The
findings indicated that most of the respondents had a tertiary education qualification.
This was a sum of 154 respondents that formed the larger fraction of the respondents
of 77%. The findings indicated that the highest number of respondents was under
“employed for wages”. This group summed to 186 out of the 200 respondents or a
massive 93% of the total findings.
In addition to commonly used demographic characteristics, narrower profiling
in relation to credit card familiarity provided additional findings for the survey. A
majority of the respondents, making a total of 86 out of 200 had awareness of credit
cards but had never used them. This group presented a 43% majority. Moreover, from
the findings, 92 respondents had never or almost never used a credit card; this
amounted to 46% of the results. The highest frequency in debt level from the survey
was found to be null with 71 respondents out of the
200. This was a 35% absence in debt among the respondents. The results of the survey
showed that 66 out of the 200 respondents were not sure of their likelihood to use a
credit card in the future. These respondents made up 33.5% of the survey. The
majority did not own any credit card and this group summed to 102 respondents or
51% absence of credit card ownership. The survey data results indicated that 103 out
200 respondents never used a credit card and this marked a more than half the sample
with 51% valid percent.

18
MEANS AND RELIABILITY OF VARIABLES
Table shows the mean values. Standard deviation and the reliabity of each variables.
Financial Confidence had the highest mean (FC=3.743) and followed by Financial
Literacy (FL=3.244), Financial Well-being (FW= 2.663) and Attitude towards credit
(ATC=2.474). Customer Spending variable had the lowest mean (CS=2.003). The
majority of the variables had a reliability coefficient greater than 0.6 which is
considered good. For financial literacy and financial confidence, the reliability
coefficients were greater than 0.60 one having 0.773 and the other 0.754 reliability
respectively. These figures were considered good in terms of data analysis. Only
financial wellbeing and debt (dependent variable) had a lower coefficient of 0.570 and
0.546 respectively. Given that most of the reliability coefficients of the variables were
greater than 0.50, the internal consistency reliability for the study could be considered
acceptable. Reliability of 0.5 and higher are considered adequate for measurement as
shown in previous studies (Pedhazur, Pedhazur Schmelkin, 1991);(Caplan, Naidu, &
Tripathi, et al. 1984); (Ellis, et al. 1988);(Nunnally, et al. 1978).

ID VARIABLES ME STD. CONBACH’S ALPHA

AN DEVIATIO
N
FW Financial 2.66 0.7622 0.570
Well- 3
being
AT Attitude 2.47 0.6375 0.661
C towards 4
Credit
FL Financial 3.24 0.7995 0.773
Literacy 4
FC Financial 3.74 0.6655 0.754
Confiden 3
ce
CS Customer 2.00 0.6771 0.657
Spending 3
IR Interest 3.19 0.6820 0.607

19
 Rate 6
CC Credit 3.47 0.8413 0.546
D Card 8
Debt

CORRELATION ANALYSIS (MATRIX)

Table showed that there was a significant positive correlation for debt to financial
wellbeing, attitude towards credit, financial literacy, financial confidence and interest
rate. There was however no significant correlation between debt and consumer
spending at the given significance level.
CORRELATION MATRIX

FW ATC FL FC CS IR Debt

FW 1

ATC 0.093 1

FL -0.164* -0.010 1

FC -0.152* -0.032 0.605* 1

*

CS 0.323* 0.213* -0.076 -0.061 1

* *

IR 0.136 0.170* 0.266* 0.311* 0.191* 1

* * *

20
REGRESSION ANALYSIS
Table showed the correlation of the identified explanatory variables with the
dependent variable as 0.289 or 28.9% once the inter correlations of the explanatory
variables were accounted for. A better measure of the correlation was shown with the
adjusted R value (Adjusted R Square) indicated as 0.267. This measured the explained
variance or change in the dependent variable due to influence or change in the
independent variables. Adjusted R Square value indicated that 26.7% of the changes
that occurred in debt level were explained by the changes in the independent variables.
MULTIPLE REGRESSION ANALYSIS
Table 4.5 showed the output for Multiple Regression Coefficient. Basing on Beta
coefficient, the highest value of the variables that contributed to a larger value change
in Debt level was the Interest rate with a beta coefficient of 0.422. On the other
extreme, the predictor variable which had a lower contribution to value change was
consumer spending with a beta of 0.016. In order for the hypotheses statements to be
supported, the p- value (Sig.) had to be less than the 0.05 level of significance (Dallal,
2003).
According to the findings, the only independent variables with a p-level less than the
0.05 significance level were financial wellbeing, financial literacy, and interest rate
with p-values of 0.017, 0.043, and .000 respectively. The rest of the independent
variables fell above the 0.05 significance level therefore only the aforementioned
being Financial Wellbeing, Financial Literacy and Interest Rate where the only
supported among the six hypothesis statements formulated in the previous section of
the study. The p-value for Attitude towards Credit was 0.099 which was greater than
the significance level used of 0.05. For Financial Confidence, the p-value was
recorded at 0.769 while that of Consumer Spending was 0.812. The overall assessment
of the regression model may be done by checking multicollinearity using Variance
Inflation Factor (VIF) and Tolerance (Al-Hammad, 2001). Stevens et. al (2002)
suggested that the cutoff point for VIF should be a value of 10 where a value beyond
that was considered to reveal multicollinearity. On the other hand, according to
O‟Brienet. al (2007) a tolerance less than 0.20 or 0.10 indicates multicollinearity
problem. In the data findings, the problem of multicollinearity did not exists as all the
tolerance and variance inflation factor numbers fell within the appropriate ranges.
There was sufficient measure that there were no misleading p-values (Motulsky, 2002)

21
as indicated by the collinearity statistics.
MULTIPLE REGRESSION COEFFICIENTS

Standard sized
Coefficients
Unstandardized nts Collinearity
Coefficients Statistics
Std. Tolera
Model B Error Beta t Sig. nce VIF

1 0.617 0.429 1.439 0.152

(Constant)

Financial 0.175 0.072 0.159 2.415 0.017 0.854 1.171

Wellbeing
0.104 1.658 0.099 0.933 1.072
Attitude 0.137 0.083
Towards
Credit
Financial 0.166 0.081 0.158 2.041 0.043 0.618 1.618
Literacy
Financial -0.029 0.099 -0.023 - 0.769 0.600 1.667
0.294
Confidence
Consumer -0.020 0.082 -0.016 - 0.812 0.843 1.187
0.239
Spending
Interest 0.521 0.083 0.422 6.270 0.000 0.811 1.232
Rate

Table below illustrated the substantiated hypothesis statements and those that were
not substantiated. Financial Wellbeing with a p-value of 0.017, followed by Financial

22
Literacy with a significance value of 0.043, and Interest Rate with a p-value of 0.00
made up the variables indicated to cause significant change on the dependent variable
of study, Debt. On the other hand, Attitude towards Credit, Financial Confidence, and
Consumer Spending were not significant variables in the study with p-values that
exceeded the 0.05 significant levels with p-values of 0.099, 0.769, and 0.812
respectively.
SUMMARY OF HYPOTESES TEST
Hypotheses p- Decision
value
H1 Low financial wellbeing will 0.017 Supported
positively influencecredit card debt
level.

H2 High positive attitude towards 0.099 Not Supported

credit will positively influence
credit card debtlevel.

H3 Low financial 0.043 Supported

literacy will positively influence
credit card debt
level.
H4 High financial confidence will 0.769 Not Supported
positively influence credit card debt
level.
H5 High consumer spending will 0.812 Not Supported
positively influence credit card debt
level.
H6 High interest rate will positively 0.000 Supported
Influence credit card debt level.

23
 CHAPTER- 7
RESULTS & FINDINGS
The findings revealed the minimal ownership between one and two cards with only a
few users possessing more than two. The study indicated that financial wellbeing,
interest rate, and financial literacy had a significant influence of the variations in
household debt. On the other hand, attitude towards credit, financial confidence, and
consumer spending did not make a significant influence on the changes in household
debt levels. These findings provide room for further analysis of more possible
determinants of household debt. Lastly, the study was meant to provide a platform for
introducing policies to improve the household debt burden faced by many individuals.
Based on the findings, the government may consider modification in the regulatory
framework towards financial institutions in order to safeguard the interest of
households from the claws of high profit oriented lending institutions that disregard
the financial stability of consumers. The government may establish a ceiling on the
interest rates charged on credit card debt to avoid the cumulative feature of interest
rate charges that have been practiced in most developed nations.

24
 CHAPTER- 8
DISCUSSION & CONCLUSION
It‟s evident that credit cards play a significant role in modern-day spending habits.
While they offer convenience and flexibility, they also pose risks if not managed
responsibly. Understanding usage patterns can help individuals make informed
financial decisions, such as budgeting effectively, avoiding excessive debt, and
optimizing rewards. Additionally, financial institutions and policymakers can utilize
this data to develop targeted products and policies that align with consumer needs and
preferences while promoting financial literacy and responsible borrowing.
Many individuals use credit cards for routine monthly expenses like groceries,
utilities, and fuel. This pattern suggests that consumers prefer the convenience of
credit cards for everyday purchases and possibly to earn rewards or cash back. Some
users reserve their credit cards for significant purchases such as electronics, furniture,
or vacations. This pattern might indicate a preference for leveraging credit for larger
expenses rather than tying up cash flow. Credit cards often serve as a financial safety
net for unexpected expenses or emergencies. A sudden spike in credit card usage
could signal financial distress or unforeseen circumstances requiring immediate funds.

25
 CHAPTER- 9
LIMITATIONS OF THE STUDY
During the study a few limitations were encountered above most being the limited
time measurement for data collection. The process required sufficient time to identify
potential respondents and distribute optimum questionnaires to people but due to
limited time period of distribution, distributing to many respondents was difficult and
there was little time to explain difficult questions or get feedback from respondents
during collection. There was also a scope limitation of the study due to focus on a few
variables of influence including financial wellbeing, attitude towards credit, financial
literacy, financial confidence, consumer spending and interest. The study could have
also focused on more influencing factors beyond the abovementioned. In addition, the
scope restricted the in-depth analysis of relationships among the identified variables,
which could be helpful in research. Another limitation was the low response rate.
There was a low response rate which amounted to only 200 valid respondents out of
an expected 305. This limitation restricted the findings to be sufficient enough to
generalize to the rest of the population.

26
 CHAPTER- 10
SUGGESTIONS & RECOMMENDATIONS
In order to improve the quality of future research, development of a longer time
measurement for data collection should be considered. A proper time frame of about
two months may be used to ensure that there is sufficient time to distribute
questionnaires as well as receive them. With a longer time frame, there can be
clarification and feedback between the researcher and the selected respondents which
will be useful in providing reliable and sufficient data. In the future, researchers may
also extend the scope of the study beyond the one covered within this research. There
are more influential factors that affect household debt which may include important
factors including institutional information sharing or government regulations.

27
 BIBLIOGRAPHY
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Distress among British households. Working Paper , 9-11.
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465.
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Consumers:Their Financial Practices, Financial Well-being, and Health. Financial
Counselling and Planning , 16 (1), 71-77.
6. B.Z, Cynamon., & S.M, Fazzari. (2008). Household Debt in the Consumer Age. 15-
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7. C.A, Robb. (2007, December). College Students and Credit Card Use: The Effect of
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Indebtedness and Hosehold Financial Distress. Working Paper Series , 1115, 12-21.
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Economic Research , pp. 3-5.
11. Graduate & Professional Student Association. (2010). Retrieved Decemeber
Tuesday, 2010, from Graduate & Professional Student Association GPSA Web site:
http://www.gpsa.wsu.edu/wellbeing_financial.aspx
12. J, Kim., B, Sorhaindo., & E.T, Garman. (2003). Relationships Among Credit
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13. Kenny, D. (1996). The Design and Analysis of Social- interaction Research.
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Money Go:The Increasing Reliance on Household Debt in Canada (pp. 4-6).
Montreal, Quebec: Certified General Accountants Canada.
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26. Card-Debt-Affect-You/389948.

29
 ANNEXURES
Dear respondent,
I am the student of IFTM University conducting a market survey report on
“analysis of credit card usage patterns” kindly spare few minutes to fill up
this questionnaire. Any information provided by you will be used for academic
purpose only.
RESPONDENT PROFILE

 Name of the respondent: ………………………………………………………….

 Address:
……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………………………………………
 Contact No:………………………………………………………………………..
 Age:
 Under 18
 18-24
 25-34
 35-44
 45-54
 55-64
 65 or older
 Gender:
 Male
 Female
 Non-binary
 Prefer not to say

30
QUESTIONNAIRE
 Education level:
 High School or less
 Some College/Associate Degree
 Bachelor's Degree or higher
 Occupation:
 Student
 Employed
 Self-employed/Other
CREDIT CARD OWNERSHIP AND USAGE:
1. Do you currently own a credit card?
 Yes
 No
 I prefer not to answer
2. How many credit cards do you own?
 1
 2-3
 4+
3. What is the primary reason for owning a credit card?
 Convenience
 Rewards
 Emergencies
TYPES OF TRANSACTIONS:
4. What types of purchases do you typically use your credit card for?
 Everyday expenses
 Big-ticket items
 Online shopping
5. Do you use your credit card for recurring payments?
 Yes
 No
 Sometimes
6. Have you ever used your credit card for cash advances or balance transfers?
 Yes

31
  No
 I'm not sure
PAYMENT BEHAVIOR:
7. Do you pay off your credit card balance in full each month?
 Always
 Sometimes
 Never
8. If not, what factors influence your decision to carry a balance?
 Interest rates
 Minimum payment requirements
 Financial constraints
AWARENESS OF TERMS AND CONDITIONS:
9. Are you aware of the interest rates charged on your credit card?
 Yes
 No
 I don't know
10. Do you understand the fees associated with your credit card?
 Yes
 No
 Somewhat
REWARD PROGRAMS AND INCENTIVES:
11. Are you enrolled in any credit card reward programs?
 Yes
 No
 I don't know
12. How do reward programs influence your credit card usage?
 They influence it positively
 They don't influence it
 They influence it negatively
FINANCIAL GOALS AND PLANNING:
13. Do you have financial goals?
 Yes
 No

32
  I prefer not to answer
 How does your credit card usage align with your financial goals?
 It helps me achieve my goals
 It doesn't impact my goals
 It hinders my goals

33