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International Journal of Social Sciences Vol III (4), 2014 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: ckoparal@anadolu.edu.tr 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: ncalik@anadolu.edu.tr 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 represents strongly disagree; disagree; neither agree nor disagree; agree and 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 75 International Journal of Social Sciences Vol III (4), 2014 Introduction “A credit card is a payment card issued to users as a system of payment It allows the cardholder to pay for goods and services based on the holder's promise to pay for them The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user A credit card is different from a charge card: a charge card requires the balance to be paid in full each month In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged A credit card also differs from a cash card, which can be used like currency by the owner of the card A credit card differs from a charge card also in that a credit card typically involves a thirdparty entity that pays the seller and is reimbursed by the buyer, whereas a charge card simply defers payment by the buyer until a later date.” A debit card (also known as a bank card or check card) is a plastic payment card that provides the cardholder electronic access to his or her bank account(s) at a financial institution Some cards have a stored value with which a payment is made, while most relay a message to the cardholder's bank to withdraw funds from a payer's designated bank account The card, where accepted, can be used instead of cash when making purchases In some cases, the primary account number is assigned exclusively for use on the Internet and there is no physical card.[1][2]In many countries, the use of debit cards has become so widespread that their volume has overtaken or entirely replaced cheques and, in some instances, cash transactions The development of debit cards, unlike credit cards and charge cards, has generally been country specific resulting in a number of different systems around the world, which were often incompatible Since the mid-2000s, a number of initiatives have allowed debit cards issued in one country to be used in other countries and allowed their use for internet and phone purchases Unlike credit and charge cards, payments using a debit card are immediately transferred from the cardholder's designated bank account, instead of them paying the money back at a later date Debit cards usually also allow for instant withdrawal of cash, acting as the ATM card for withdrawing cash Merchants may also offer cash back facilities to customers, where a customer can withdraw cash along with their purchase Although the introduction of credit card usage in Turkey has some similarities with the European countries, there is a reverse order in terms of priory with consumer credit process (individual banking) where consumer credit process started first in European countries and then credit cards usage became widespread On the other hand in Turkey this process first started with credit cards and then individual banking came into use The first credit cards introduced in Turkey is “Diners Club” credit card which was offered to the customers of the “Service-Tourist Inc (SETUR)” Which is a subsidiary of Koỗ Goup, in 1968 after getting authorization from 28 Diners Club to issue cards for domestic use After the introduction of Diners Club Cards by SETUR, Turkish Express Aviation and Tourism Ltd Co Entered into the market with “American Express (AMEX) cards These two cards sustained their leadership until 1975 without any other competitors After 1975, Eurocard, MasterCard and Access credits are introduced which along to Interbank group The offices cards are then transferred to “Anatolian Credit Cards Tourism Inc.” owned by a national bank and an insurance company After the second half of the eighties more national banks took place in this matter and widespread rapidly In USA, percent of united households that use selected payment instruments between years 2001 and 2007 is as follows (U.S Census Bureau, Statistical Abstract of the United States: 2012) : 76 International Journal of Social Sciences Vol III (4), 2014 Table Payment Instruments in USA [In percent Based on Survey of Consumer Finances conducted by the Board of Governors of the Federal Reserve System Characteristic of head of household Any of these instruments ATM Debit card Direct deposit Automatic bill paying Software (Visa and MasterCard debit cards) 2001 2007 2001 2007 2001 2007 2001 2007 2001 2007 2001 2007 All households 88.9 91.8 69.8 79.7 47.0 67.0 67.3 74.9 40.3 45.5 18.0 19.1 Under 30 years old 83.8 88.6 78.1 84.8 60.6 78.3 48.8 61.3 32.1 35.7 17.0 21.4 30 to 60 years old 89.9 92.4 76.8 85.9 53.4 74.9 64.8 72.6 44.1 48.8 22.0 21.6 61 years old and over 89.4 92.1 48.9 63.5 24.6 43.9 83.2 86.4 35.9 42.9 9.0 12.3 Low income 74.3 79.7 46.8 58.8 29.2 48.1 51.9 60.5 18.2 23.8 6.1 7.7 Moderate income 88.6 91.1 67.4 78.5 46.3 68.0 63.1 68.5 35.1 37.8 10.7 10.7 Middle income 92.5 96.4 75.2 87.5 50.0 75.0 65.7 76.8 45.1 50.2 16.3 18.8 Upper income 97.1 98.4 83.7 91.0 57.8 75.8 80.2 86.6 55.2 61.6 29.9 30.5 No degree college 85.1 88.4 63.7 74.0 42.3 63.7 61.8 68.9 33.7 38.0 10.9 11.9 College degree 96.4 98.2 81.6 90.3 56.2 72.9 78.0 85.9 53.2 59.3 31.8 32.2 Household income: Similarly the following table shows numbers of credit cards, number of holders, credit card purchasing volume and credit card debt outstanding: Table Credit Card Usage in USA Type of credit card Cardholders (mil.) Number (mil.) of cards Credit card purchase volume(bill dol.) Credit card outstanding dol.) 2000 2009 2012, proj Total 159 156 Visa 93 MasterCard 2000 2009 2012, proj 2000 2009 2012, proj 2000 2009 2012, proj 160 1,425 1,245 1,167 1,242 1,944 2,378 680 886 870 100 107 255 270 261 487 764 932 268 366 359 86 80 84 200 203 174 281 477 524 212 268 255 Store 114 100 96 597 470 455 120 132 135 92 102 94 Oil company 76 58 56 98 61 60 45 45 52 Discover 36 40 43 50 54 59 69 100 127 48 53 54 American Express 23 34 37 33 49 52 221 420 603 50 87 97 77 debt (bill International Journal of Social Sciences Vol III (4), 2014 The Rest 133 105 81 192 137 106 18 5 In Turkey, credit card usage in numbers and purchase volume supplied from Tudkish Interbank Card Center) : is as follows (Data Table Credit Card Types and Their Number by Years in Turkey 2001 2002 2003 2004 2005 2006 2007 7.829.906 7.906.995 9.572.460 13.202.147 15.989.986 17.800.385 20.878.744 MasterCard 6.102.024 7.565.766 10.255.667 13.450.664 13.963.095 14.623.148 16.416.829 Other 64.876 40.019 35.040 28.677 25.162 9.800 39.606 Total 13.996.806 15.705.370 19.863.167 26.681.128 29.978.243 32.433.333 37.335.179 Visa Table Credit Card Transaction Types, Transaction Number and Purchase Volume (mil USD) by Years in Turkey 2001 2002 2003 2004 2005 2006 2007 Automatic Teller Machine (ATM) 12.127 12.069 12.857 13.544 14.823 16.511 18.800 Point of Sale(POS) 364.636 495.718 662.429 912.118 1.140.957 1.282.658 1.453.877 Transaction Number 5.449.228 8.550.522 12.428.032 19.928.312 33.773.664 50.048.349 73.850.404 Purchase Volume (Million USD) 464 596 788 1.080 1.241 1.272 1.366 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’ 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 78 International Journal of Social Sciences Vol III (4), 2014 variable between money attitudes (power, distrust and anxiety as independent variables) and compulsive buying behavior (dependent variable (Robents and Jones, 216) Fig Relationship Between Money Attitudes and Compulsive Buying Power Compulsive Buying Distrust Anxiety Credit Card Usage 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 Relationship Between Psychological Traits and Compulsive Buying Self-Esteem Power Prestige Credit Card Misuse Compulsive Buying Risk-Taking 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 79 International Journal of Social Sciences Vol III (4), 2014 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 prepurchase 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 80 International Journal of Social Sciences Vol III (4), 2014 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” 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 Variables and Their Explanations Variable NOOFCARD USEPERIO TOTALNUM MOSTPRAC PRODGROU SECURITY COMPLAIN CANCELLE MAXLIMIT FULLPAYM AGITATED NOCAREPR SPENDMOR AVOIDDEF UNDERLIM PRESTIGE PREFCRCA Explanation Number of credit cards that you actively use How long have you been using credit cards? What is the total limit for your credit card(s)? What is your most common practice in using credit cards? Which of the following product groups or service types that you spend most with your credit cards? Apart from user name and password (mobile password) what type of security tools you use while shopping online: When you have a complaint about your credit card, whom you usually appeal? If one or more of your credit cards are canceled in the last two years, what is the main reason of this? I like to use the maximum limit of my credit cards I always pay off my credit card debt fully and timely When payment date of my credit card(s) approaches, I often get agitated I don't care much about the price of a product when I use my credit card(s) Using credit cards drive me to spend more I always avoid default on my loans of my credit card(s) I never go beyond my credit card(s) limit(s) I consider credit cards as a sign of prestige I prefer credit cards, because they offer payment in installments without charging interest 81 Mean 1.80 2.53 2.54 1.41 SD 0.92 0.76 1.39 0.80 3.04 2.56 3.75 1.40 2.95 1.30 3.46 1,51 2.38 1.83 2.40 0.82 1.39 1,30 3.87 1.18 2.67 2.13 3.01 2.99 3.90 1.28 1.20 1.33 1.11 1.20 International Journal of Social Sciences Vol III (4), 2014 FEELSECU CONTREXP BUDGETLI SIGNMODE CARELESS RECKLESS REASNBLI OVERSPEN ADVANTAG SELFCONF EXCESSCA NOMEMBRF YEARNOLD FREEEXCS INTRSTIN IMPRESSO DREADEXC LESSATTN MINIMDEB FEELBETT COMPULSI ESTIMABL IMPULSIV AGE GENDER OCCUPATI EDCLEVEL INCOME I feel fully secure when I shop online with a credit card It is more difficult to control expenditures with creditcard payment My budget limits me from over-spending even if I use my credit cards I consider credit card usage as a sign of modernity I don't care much about the price of a product when I use my credit card I consider myself a bit reckless in taking risks The banks charge reasonable interest rates on credit cards (in case of default, partial payment, installment purchases etc.) Credit cards lead people to overspending Paying with credit card is always more advantageous than paying with cash It gives me self-confidence to pay with credit card when I'm abroad I believe that I have excessive credit cards I cancel the credit cards which require membership fees I often yearn for the old days without credit cards Credit card usage gives me the freedom of excess spending I am more interested in the amount of money people have, rather than their success in their occupations I often purchase things to impress the other people My habit of excess credit card usage often frightens my family members I pay less attention to security when excitement and adventure are under consideration I developed the habit of paying the minimum debt on my credit card(s) bills Spending money makes me feel better Sometimes I lose my control and purchases that I cannot afford with my credit card I feel myself as an estimable person or at least not inferior than the other people I often act impulsive when I my purchases with credit cards Age ( ) 1) 18-25 2) 26-40 3) 41-62 4) 62+ Gender ( ) 1) Female 2) Male Occupation ( ) 1) Wage or Salary Earner 2) Tradesman/businessman 3) Self-employed, professional or manager 4) Retired 5) Housewife 6) Student Education Level (Last Graduated) 1) Elementary 2) High School 3) College or University Monthly Household Income ($.) ( ) 1) 0-500 2) 501-1000 3) 1001-2000 4) 2001-4000 5) 4000+ 82 2.26 4,01 1.20 1.01 2.53 1.25 3.35 3.69 1.19 1.20 2.70 2.18 1.31 1.202 2,57 2.45 1.80 1.15 3.71 1.11 3.28 2.65 1.96 360 1.13 1.17 1.14 1.26 2.39 1.12 2.80 1.79 1.22 1.06 1.72 1.01 2,44 1,27 2.17 2.28 1.19 1.30 2.72 1,23 2.30 1.23 2.91 1.04 1.69 2.05 0,45 0.92 1.55 0,50 2.87 1.63 International Journal of Social Sciences Vol III (4), 2014 Frequency Charts for the First Eight Questions on Nominal Scale The following charts depict the frequency distributions for the first eight questions on nominal scale: Figure Number of Credit Cards that Respondents Actively Use Number of credit cards that you actively use 6,82 % One Two 13,64% Three More than khree 47,39% 32,16% Figure The Period that the Respondents are Using Their Credit Cards How long have you been using credit cards? 9,77% Less than one year 6,5 9% 1-4 years 5-12 years More than 12 years 40,45% 43,18% Figure Total Limit of the Respondents Cards 83 International Journal of Social Sciences Vol III (4), 2014 What is the total limit for your credit card(s)? less than $500 3, 64 % 7,0 5% $501-1250 $1251-2500 $2501-5000 28,41% 12,95% $500110000 More than $10000 21,25% 26,70% Figure The Most Common Practice of the Respondents in Using Credit Cards What is your most common practice in using credit cards? Directly by POS device By mailorder 19,55% Online (by internet) 1… 78,52% Figure The Product Groups or Service Types that the Respondents Spend Most with Their Credit Cards 84 International Journal of Social Sciences Vol III (4), 2014 Which of the following product groups or service types that you spend most with your credit cards? 5,0 … 0% … Store purchases (food, detergents, small household appliances, etc.) , % Books, stationery, vcd-dvd, magazines, etc.) Clothing, shoes, sunglasses, accessories, sundries, etc.) 6,02 % 41,36% 7,73% TV, cell-phone, audio-video systems, iphone, ipad, computers (desktop, laptop, notebook), mp3, etc Cameras, handy cams, printers, optics, musical instruments, etc Gas (for vehicles), utilities (for house), tax (all direct taxes), etc 28,64% 4, 5… Hotel, restaurant, travel, holiday, entertainment, etc Figure Apart From User Name and Password (Mobile Password) the Type of Security Tools the Respondents Use While Shopping Online Apart from user name and password (mobile password) what type of security tools you use while shopping online: Virtual card 3D Secure 14,20% I don’t use a security tool 36,82% 9,55% I don’t shop online with credit card 39,43% Figure The Appeal Point of the Respondents When They Have a Complaint About Their Credit Cards 85 International Journal of Social Sciences Vol III (4), 2014 When you have a complaint about your credit card, whom you usually appeal? To the bank directly To local authoritie s 27,16% To the issuer of the card (Visa, Master Card, AMEX etc.) 54,77% 5,45% Point of sale (of the purchase) 12,61% Figure 10 The Main Reason for the Cancellation of Respondents’ Credit Cards If one or more of your credit cards are canceled in the last two years, what is the main reason of this? I terminated all my business with that bank I had too many cards so I wanted to get rid of some of them … 13,98% The bank charged excessive membership fee 36,02% 23,07% … 24,43% I did not make use of that (those) card(s) for a long time The bank canceled it (them) because I did not pay my debts regularly Hypotheses Several research hypotheses are formulated and tested as follows; a Relationship Between Consumer Demographics and Credit Card Usage Behavior: H1 : There are statistically significant differences between the consumer demographics and credit card usage behavior b Relationship Between Price Sensitivity and Shopping With Credit Cards 86 International Journal of Social Sciences Vol III (4), 2014 H2 People who spend excessively with credit cards not care much about the price of the product H3 Spending more with credit cards is positively correlated with price insensitivity H4 There is a significant positive relationship between price insensitivity and compulsive buying behavior c Relationship Between Compulsive Buying Behavior and Overspending H5 Compulsive Buying Behavior Leads People to Overspending with Credit Cards d Relationship Between Compulsive Buying Behavior and Consumers’ Psychographical Traits H6 Compulsive buying behavior is positively correlated with psycho-graphical traits as, power, prestige, anxiety, self-esteem self-confidence and risk-taking Analyses and Results Hypotheses Tests Results H1 is sustained at most of the demographic traits Bisection are shown on the following tables: is hypotheses formulated in the previous Table Relationship Between Consumer Demographics and Credit Card Usage Behavior (*): Consumer Demographics Statements Age Gender Occupation rejected I like to use the maximum limit 41-62 female of my credit cards 84.4 % wage and I always pay off my credit card rejected female salary earner debt fully and timely 76.6 % When payment date of my 18-25 female retired credit card(s) approaches, I often get agitated 63.3 % I don't care much about the 26-40 female retired price of a product when I use my credit card(s) 69.5 % Using credit cards drive me to 18-25 female rejected spend more 51.2 % I always avoid default on my 18-25 female retired loans of my credit card(s) 71.7 % I never go beyond my credit 18-25 female retired card(s) limit(s) +62 male wage and 42.5 % 44.0% salary earner I consider credit cards as a sign 26-40 female retired 87 Education Income rejected rejected rejected $4000+ rejected $20014000 rejected $20014000 college or rejected university (*) Elementary $0-400 and high school rejected $20014000 $10012000 rejected $2001- International Journal of Social Sciences Vol III (4), 2014 of prestige 74.3 % I prefer credit cards, because +62 they offer payment in installments without charging interest 73.5 % I feel fully secure when I shop 41-62 online with a credit card 65.0 % 4000 $20014000 female retired rejected female Self employed professional or manager (*) rejected $20014000 It is more difficult to control +62 expenditures with credit-card payment 80.1 % My budget limits me from over- 18-25 spending even if I use my credit cards 49.8 % I consider credit card usage as 62+ a sign of modernity 54.0 % Male Rejected rejected Rejected female retired I don't care much about the 62+ price of a product when I use my credit card 66.1 % I consider myself a bit reckless 18-25 in taking risks 49.6 % female elementary & high school tradesman/ elementary businessman & high school Retired rejected $20014000 female male Self employed professional or manager retired rejected Rejected The banks charge reasonable 18-25 interest rates on credit cards (in case of default, partial payment, installment purchases etc.) 71.1 % Credit cards lead people to 18-25 overspending 54.5 % female retired rejected $20014000 female retired rejected $20014000 Paying with credit card is always more advantageous than paying with cash 55.5 % It gives me self-confidence to pay with credit card when I'm abroad 78.3 % I believe that I have excessive credit cards 47.2 % I cancel the credit cards which require membership fees 43.1 % I often yearn for the old days without credit cards 78.5 % Credit card usage gives me the 18-25 female (*) rejected rejected Rejected 62+ Male tradesman/ rejected businessman 62+ Male Rejected 18-25 female retired (*) 62+ female wage and elementary $4000+ salary earner & high 62+ female Rejected Male 88 rejected $20014000 $10012000 college & $1001university 2000 rejected $20014000 school (*) Rejected $2001- International Journal of Social Sciences Vol III (4), 2014 freedom of excess spending 61.0 % 4000 $5011000 $4000+ (*) I am more interested in the 26-40 amount of money people have, rather than their success in their occupations 60.5 % I often purchase things to 18-25 impress the other people 47.3 % rejected tradesman/ Rejected businessman female male retired Rejected tradesman/ businessman My habit of excess credit card 18-25 usage often frightens my family members 80.5 % I pay less attention to security 18-25 when excitement and adventure are under consideration 83.9 % I developed the habit of paying 18-25 the minimum debt on my credit card(s) bills 63.1 % female retired Rejected female retired rejected $20014000 female Self employed professional or manager rejected rejected Spending money makes me feel 18-25 better 70.9 % female retired Sometimes I lose my control 18-25 and purchases that I cannot afford with my credit card 67.6 % I feel myself as an estimable 18-25 person or at least not inferior than the other people 48.1 % I often act impulsive when I 18-25 my purchases with credit cards 67.1 % female retired elementary $2001& high 4000 school (*) rejected $20014000 female retired female Self employed professional or manager $20014000 $5011000 $20014000 college & $2001university 4000 $4000+ rejected $20014000 Tests are conducted at Agree + Strongly Agree Disagree + Strongly Disagree (*) Those demographics which differ significantly from others at level H2 is tested and is not sustained at both significance levels, H3 proved a significant inverse relationship between the proposal that “using credit cards drive the people to spend more and the price insensitivity of such people” In other words this hypothesis revealed just the opposite of what has been intended Chi-Square analysis proved that 53.1 % of the price conscious consumers agreed with the idea that using credit cards drive them to spend more; whereas only 23.3 % of the price insensitive respondents accepted it H4 also ends up with an inverse (negative) relationship between price insensitivity and compulsive buying behavior where 62.4 % of the price conscious consumers admit (strongly agree) that they lose control from time to time and purchases that they cannot afford with 89 International Journal of Social Sciences Vol III (4), 2014 their credit card On the other hand 85.7 % of the price insensitive consumers reject this proposal The same is also true with impulsive buying behavior (63.5 % vs 82.8 %), H5 is sustained at all levels of compulsive behavior as shown on the following table: Table Relationship Between Compulsive Buying Behavior and Overspending Statements for Compulsive Behavior Spending money makes me feel better I often act impulsive when I my purchases with credit cards Sometimes I lose my control and purchases that I cannot afford with my credit card Overspending Agree % Average Agree 25.7 % 80.0 % Disagree Average % Disagree 54.5 % 12.9 % Spending Within Credit Card Limits Disagree % Agree % Average Disagree Average Agree 25.7 % 9.7 % 54.5 % 76.3 % 25.4 % 60.8 % 59.5 % 25.5 % 25.4 % 9.4 % 59.5 % 75.2 % 25.7 % 45.2 % 54.5 % 43.7 % 25.7 % 15.0 % 54.5 % 64.6 % Agree + Strongly Agree Disagree + Strongly Disagree The average figures on that table depicts the average agreement and disagreement rates of total consumers who exhibit compulsive and non-compulsive buying behavior The percentages on the other columns are the discrete agreement and disagreement values respectively for these consumers All these values reveal the fact that for those consumers who exhibit compulsive buying behavior overspending agreement rates are far above the total consumers’ average and contrary to this their disagreement levels are below the average On the other and such consumers’ agreement rates for ‘spending within credit card limits’ are much below the population’s average and disagreement dates are always higher than the total consumers’ average H6 is accepted for most of the psycho-graphical traits except “prestige” Consequently, traits like risk taking (except one level), self-confidence, power, self-estem and excitement all lead to and positively correlated (at