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Credit card issues

BUSINESS RESEARCH REPORT

The minimization of credit card system

issues in HBL & Standard chartered bank

SUBMITTED BY

Group: CHANCELLORS

Section: 3

SUBMITTED TO

ASSISTANT PROFESSOR MRS. AMEENA ZAFAR

MOHAMMAD ALI JINNAH UNIVERSITY

ISLAMABAD CAMPUS

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Business Research and Report writing

“What are the pros and cons of the credit card system for the customers and
how can these issues be minimized in HBL and Standard Chartered bank”

Submitted by:

Chancellors

Submitted By:

Fawad Iftikhar MB083010


Course Instructor:

Mrs. Ameena Zafar

Table of contents

1 Abstract……………………………………………………………………… ii

2 Dedication…………………………………………………………………… v

3 Acknowledgment……………………………………………………………. vi

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Ch# 1 Introduction…………………………………………………………………… 1

Ch# 2 Literature Review……………………………………………………………. 3

Ch# 3 Research Methodology…………………………………………………… 12

Ch# 4 Data Collection……………………………………………………………….. 14

Ch# 5 Conclusion………………………………………………………………………. 22

Ch# 6 Appendixes…………………………………………………………………….. 27

Abstract

The main focus of our study is the usage of credit cards and its impact on the customers

and on the banks. This study is actually a comparative study as it will cover the two banks HBL

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and Standard Chartered. We studied the credit card system of those banks, its advantages and

disadvantages and also we were focusing on the issue that arises while issuing credit cards.

Everything changes, as the time changes. The shape of money also changed. The credit

card is the advanced form of the money that makes the life so luxuries and expensive. However it

has the benefits and some drawbacks. While considering this subject we come to a problem

statement that is the pros and cons of credit card system and how can these issues be minimized

in HBL and Standard Charted Bank?

In this short period we may use the both approaches the primary approach and the

secondary approach. In secondary method we use the articles half of them are written by the

international authors and half will be from local author. There was an article published in

October 2001 named Credit Card Model the author Manas Ratha talks about the credit card

model, he writes that credit cards is one of the ways to borrow money and people use as they

want. He wrote about the functionality of credit cards. And he also mentions that the interest

payments affect the credit cards user’s life. Another article was written the title was Credit Card

Caution by Timothy P. Cahill he was highlighted the college students they have credit cards but

they have no knowledge about the terms and condition of interest and repayment. They just have

credit cards for prudence. And this is the big issue for them. They make a survey and see the

knowledge of students. Author Raymond J. Keating was written an article named Credit Card

and Small Business he said that credit cards help in small business and also increases its sales

volume.

By studying literature review we find that most of the authors highlight the policies

made for credit cards, credit risk and management of those risks. In our research we will study

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credit card customers, and also how banks manage that system and how the issues be minimized.

In short we will study bot0h the seller of credit cards that are banks and customers of those credit

cards.

In our research we will study the pros and cons of credit card system for the

customers. Our research is different from the previous researches that have been done because

we will study both company and customer perspective related to credit card system. Another

think is that we will take two banks as a sample for our research. And we will also highlight how

the negative issues will be minimized in credit card system.

For collecting the primary data we adopt the quantitative and qualitative methods. We

plan to get interview from the higher authorities of these banks to get the specific information

about our subject. And plan for a survey to get the response from the users of the credit cards.

The survey is taken in the bank while the customers transact through credit cards, so we can

easily come close to them. And the interviewees were Ayesha Bilour Branch Manager of HBL

and Ali Iqbal Manager Standard chartered bank.

We assume the result, which the respondents of the survey should favor of the facility of

credit card system. So that will be the positive result of our whole study. As customer is the most

important person in any business customer is actually not dependents upon us we are dependent

upon him. Customer is life blood for business; hence it’s necessary to understand the credit card

system. This research can implement only for the credit sector and they willing to provide credit

on better rules and condition to their customers. That research will beneficial for both customers

and banks. Customers come to know the operations of credit card system and also advantages

and disadvantages of credit cards. The respondents that we were selected all users of credit cards

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so that they were providing better results. On the other hand banks will also benefit with our

research in such a way that they get customer response and behavior towards credit cards. Finally

we are the greatest beneficiaries of our research we get experience and knowledge from that

research that will definitely help us in future. We were visited banks that also enhance our skills

and social circuit.

From the problem statement to the conclusion we will spend almost four months to

produce the result in the support of our hypotheses with the help of survey and interview from

the customers and the management of the HBL and Standard Chartered Bank respectively. Our

research was on the pros and cons of credit card system and the issues that are arise while issuing

credit cards and we consider two banks HBL and Standard Chartered. The whole research that

we have done provide us positive results from both customers and banks perspective.

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Dedication

We dedicated this report to our beloved parents who always pray for our success.

And also to our project instructor Mrs. Ameena Zafar who gave us opportunity to do this

project and also help us in doing that project.

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Acknowledgement

First of all we thank to Allah almighty; giving us courage to do this report we

believe that without the courage given by Allah we would never have been able to

complete this report. Besides all, we are thankful to our course co-coordinator Mrs.

Ameena Zafar. After that we want to thank all the people who helped us during the tough

times we faced while making this report. We also thank our parents for their support and

help.

Introduction

Firstly we introduce our research topic that was what are the pros and cons of credit card

system, how can these issues minimized in HBL and Standard chartered. The reason for selecting

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that topic was that nowadays good percentage of people goes for credit cards and banks also gets

profit out of it. During our research we want to get the results from customer and banks

perspective. We were able to get the benefits and drawbacks of the credit cards, and also what

kind of issues faced by banks while issuing credit card system. We visited both the banks in

order to get their view about credit card system, which enhances our skill and knowledge as well.

While selecting our research topic we face some limitation and problems as well. We

were having limited time for that research, and for that purpose we were also covering limited

area for research. We narrow down our research towards two banks that were HBL and Standard

Chartered. And also our research topic was focusing on pros and cons of credit card system

because we were not able to study all the function of banks in that particular time period. By

keeping in mind that limitation of time we were just selecting two banks because we were not

able to study all banks in that span of time.

We selected two different banks in order to compare their credit card system, after that

we were able to get better results. We selected HBL and Standard Chartered the reason for

selecting those banks was these banks are quite successful banks in Pakistan as far as their

performance is concern. We get desirable results from those banks.

Habib Bank Limited commonly known as HBL is the largest bank in Pakistan. HBL has a

network of over 1450 branches in Pakistan and 55 branches worldwide. It has a domestic market

share of 40%. We selected that bank because of its popularity all over in Pakistan. HBL now

starts online banking where people made online deposits and made their transaction and

payments online through credit cards. By keeping in mind this thing we selected the bank

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because HBL sells large number of credit cards and it has good credit card system that helped us

in our research.

Another bank that we selected for our research was Standard Chartered Limited. It is

Pakistan’s oldest foreign commercial bank. It has 162 branches in Pakistan which have 9000

employees. The reason for selecting this bank was it is a foreign bank and well established bank,

and also one of the private banks in Pakistan. This bank uses latest techniques in order to

perform their operations. Standard Chartered bank has good credit card system and we get good

response from them during our research.

This research is beneficial for us because we learn a lot about banks operations specially

credit cards system. It was good to make links with professional peoples. This research is also

beneficial for those banks which we selected for our research because they will able to get their

customer’s perspective and views about their performance and credit card system that help them

to improve their performance.

Literature review

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1. The first article title is Spend and Save on HBL Credit Card by Saleem Chohan.

This article is about HBL credit card offers. Habib Bank Limited has offered “Spend and

Save” promotion for its credit card holders. The offer is valid from July 1 to July 31, 2009. To

benefit from this limited offer the customer would need to make a transaction of more than

Rs600 with their HBL credit card on point of sale (POS) terminal. If you are HBL Credit Card

customer, you should note the above problem in HBL’s communication in case you spend

exactly Rs6, 000 and you need to claim Rs500 in saving.

http://pktaxal.com/blog/2009/06/20/spend-and-save-on-hbl-credit-card/

This article is about an offer of spend and save through credit cards. And this offer is for

credit card holders. In this article the author was only focusing on credit cards benefits, he told

that if someone want to avail that benefit he has to make some transactions from HBL accounts.

Pakistan Credit Cards Pakistan Economy Finance Banks News by Tanha Karim

Pakistan Credit Cards evolved with the introduction of credit cards by Habib Bank, the

biggest bank in the country, when it launched the golden card a couple of decades ago. Credit

cards gained popularity in Pakistan, however, only in the 1990s when Citibank launched its

Citibank Pakistan Visa Card. The aggressive marketing and huge investment not only made

Citibank the industry leader in Pakistan but proved to be a turning point in the history of credit

cards in the nation. The largest issuers of credit cards in Pakistan include HBL and Standard

Chartered Bank is as followed,

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Habib Bank Ltd can issue Habib Bank Gold Card and Habib Bank Green Card. Standard

Chartered Bank American Express Credit Card, Easy credit Card, Master Card, VISA Card

http://www.friendsmania.net/forum/pakistan-economy-finance-banks-news/8826.htm

In this article author said that HBL is working for the promotion of credit cards. He said

that HBL launched golden card for the first time in Pakistan. He further said that HBL is doing

much for providing awareness to the people about credit cards.

2. Standard Chartered credit cards- growing your purchase capability, Posted: Apr 28, 2009

The Standard Chartered credit card is very much accepted when it comes to giving

utmost profits to their card users. Different types of credit cards are presented by Standard

Chartered Bank and each of these cards come with their own individual features. If one uses

these credit cards in a variety of shopping outlets then he or she can also win recompense points.

Afterward on, these incentive points help him in getting cash back or availing discounts on

shopping of a variety of items. The Standard Chartered credit cards also offer great discounts

although booking railway and air tickets. So, now you can save much of your operating cost

when you plan to travel. If you are going for a holiday with your entire family then the usage of

these cards would let you have striking discounts on air or train tickets

http://www.articlesbase.com/finance-articles/standard-chartered-credit-cards-growing-your-

purchase-capability-890540.html#ixzz0nwP6K6TZ

I n this article author said that Standard Chartered bank issue different kinds of credit

cards and provide profits to the credit card holders. He said that Standard Chartered also offer

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discounts. He told that people use credit cards for shopping they may also get cash discounts on

different items. Author said that by using credit cards

3. Article name is Contactless Credit Cards It was published by Consumer Report 2006

Author name was Jimmy Atkinson Published Date of publication April 3, 2006

In 2003, electronic payments (debit and credit cards) finally overtook paper-based payments

(cash and checks) as the most common way to pay for purchases.1 Two years later, a new

electronic payment revolution quietly began. American Express, Visa, and MasterCard started to

roll out contactless payment systems in select retailers around the world.

Credit cards their edge is that they are faster and more secure than traditional magnetic stripe

cards. In terms of speed, contactless credit cards have both cash and magnetic stripe cards beat.

According to Visa, the average cash transaction takes 34 seconds and magnetic stripe credit card

transactions take 24 seconds. Conversely, contactless credit card transactions take a mere 15

seconds.

http://www.findcreditcards.org/reports/contactlessreport.pdf

This is a report made by the author in 2006, in this report he highlights the one of the type

of credit cards that is contactless credit cards. He gives the advantages and disadvantages of that

particular credit card. He writes that those cards are faster and more secure than traditional

magnetic stripe cards. For more he wrote that the cards also have built in sensors that disable the

personal data if credit card is stolen. He also highlights the disadvantage of that contactless credit

cards one of the drawback is the technology makes it easier to spend more and more money

holder spend money and may end up unknowingly spending more.

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4. Article name was The Credit Card Model, Author name is Manas Ratha Published by

Massachusetts Institute of Technology, Date of publication October 2001

Credit cards are one of many ways through which people borrow money. With a credit card,

a person can make purchases without using cash. The credit card company pays for the purchase,

but the card user has to repay the money borrowed to the card company at a later time. In

addition to the amount of the purchase, the card user also has to pay interest on the loan. Interest

on a loan is calculated as a fixed fraction of the loan amount and is charged for the time period of

the loan. Interest payments reduce the amount of money the user of a credit card can spend on

regular purchases. This paper presents a model that studies the way interest payments affect the

quality of the credit card user’s life by reducing the amount of money he can spend on other

purchases.

http://sysdyn.clexchange.org/sdep/Roadmaps/RM9/D-4683-2.pdf

In this article author wrote about the credit card model, he writes that credit cards is one of

the ways to borrow money and people use as they want. He wrote about the functionality of

credit cards. And he also mentions that the interest payments affect the credit cards user’s life.

5. Article name was Credit Card caution Author name Timothy P. Cahill Published by The

New England Journal of Higher Education Date of publication Fall 2007 21

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A great way to prove the sincerity of these educational efforts is to make the qualifications to

get a credit card more difficult and deny access to credit cards if students fail to correctly answer

a formal series of questions regarding general financial literacy, the risks involved in debt

management, identity theft, and essential information specified in any given contract such as the

annual percentage rate, credit terms limits and how much time and money it will cost to pay off

the maximum balance amount. We need to educate Generation Plastic in financial literacy just as

aggressively as the industry is marketing to them.

http://web.ccsu.edu/studentaffairs/orientation/fall%2007%20pdfs/financial%20literacy

%20article%2010.10.07.pdf

In this article author tells about the college students they have credit cards but they have no

knowledge about the terms and condition of interest and repayment. They just have credit cards

for prudence. And this is the big issue for them. They make a survey and see the knowledge of

students.

6. Article name was Variables Influencing Credit Card Balances of Students at a

Midwestern University Author name is Mattson, Sahlhoff, Blackstone, Blackstone, and

Y. Nahm Published by Nasfaa Journal Date of publication 2004

Credit cards are a growing problem for Americans of all ages, especially for college-age

individuals. According to Manning in Credit Card Nation (2000), young lives have been ruined

by credit card debt. Their problems include dropping out of college, physical and emotional

health problems, family conflicts, bankruptcy, job rejections (due to poor credit histories), loan

denials, inability to rent apartments, professional school rejection, and even suicide.

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Legitimate reasons for student credit card use are convenience, security, emergency use for

unplanned family travel, medical expenses, and establishing credit histories. Reasons that should

be viewed with caution and concern are financial inexperience, purchase of non-necessities, and

keeping up with friends’ lifestyles. Credit card balances can become unwieldy when students

make only the minimum required payments and interest compounds.

http://www.nasfaa.org/Annualpubs/Journal/Vol34n2/Mattson.pdf

In this article author highlights students using credit cards. He thinks that credit cards are a

growing problem for Americans of all ages, especially college – age individuals. He also

highlights the problem arises for students due to the use of credit cards such as dropping out

from college, family conflicts, bankruptcy etc.

7. Article name some credit card issuers keep important data secret by Author name

Kenneth R. Harney Published in Washington post Date of publication Saturday, October

23, 2004

The secret is your credit card company may be depressing your credit scores by not reporting

your credit limit to the three national credit agencies. Lower credit scores in turn push you into

higher interest rates when you apply for mortgage and can add thousands of dollars of needless

extra cost for you as a homeowner.

http://www.legis.wi.gov/senate/sen27/news/HHSC/2008/INSURANCE%20CREDIT

%20SCORING-6.pdf

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In this article author writes about that how banks issues the credit cards against the mortgage

and other securities and how bank get back the loan from the card holder on the bases of

mortgage and securities.

8. Article name Credit card policy Published by Library Board of Trustee Date of

publication Approved 10/22/09

The One Card program is a commercial credit card account that offers a number of

unique controls that do not exist in a traditional credit card environment. These controls ensure

that the cards are used only for specific purchases and within specific monthly dollar limits. In

addition, verification of all charges on each month’s bill by each cardholder and by the Library

Director or his/her designee is required before the bill is submitted for payment.

The program is designed to empower authorized employees to purchase items needed for Library

business and for travel, and is an enhancement to the purchasing process and a delegation of the

purchasing authority. The use of a One Card is a privilege that has been granted to selected

employees. Certain responsibilities are associated with this privilege.

The Administrative Services Department is responsible for the management and

oversight of the program and ensures that all Library employees follow all State and local laws,

rules and policies relating to the purchasing function. Each branch manager and department head

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is responsible for the management of One Card accounts in his/her department so as to insure

that One Cards are used responsibly and in accordance with policy.

https://docs.google.com/viewer?url=http://www.nols.org/_source/docs/Policies/8-5-credit-card-

policy.pdf

In this article the author talks about policies of credit card, he tells about the maximum

transaction amount in credit card, how many credit card a person can have, appearance of card,

and matters like how to recover credit card in case of loss or theft. In whole article author tells us

about policies of credit card. In this article he talks about the functionality of credit cards.

9. Article name Credit card security on the Net: Where is it today? Author name Sankarson

Banerjee Published by Journal of financial transformation

Internet commerce is here to stay. It has become a common method of purchase for a wide

range of products, and continues to grow at a good clip. The main payment vehicle on the

Internet is, and has always been, the credit card. Indeed, the two are undividable. E-commerce

does not do well where credit card usage is not common, and the Internet has certainly given a

boost to card spending.

The credit card industry has responded with many measures aimed at lowering the rate of

fraud to acceptable levels. Some measures have, over the years, become quite widespread. This

article studies five schemes that were launched by the credit card industry in the last few years,

and how well they have served their purpose.

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https://docs.google.com/viewer?url=http://www.mphasis.com/pdfs/Shanky_article.pdf

In this article author tells about online business that is E-commerce and usage of credit cards.

He also talks about frauds in online business through credit cards. This article defines the five

schemes that were launched by the credit industry.

10. Article name Credit Cards and Small Business Author name Raymond J. Keating

Date Publication March 2009

In this study, “Credit Cards and Small Business: The Benefits, Opportunities and Policy

Debate,” SBE Council Chief Economist Raymond J. Keating highlights key moments in the

history of the credit card business, and notes how the modern system works. Keating looks at the

“interchange fee,” and helps readers understand the economics of “two-sided markets.” He walks

through the facts, the trends, the numbers, and the many benefits to small businesses.

Beyond the fact that credit cards increase sales and are an important financing tool for small

businesses, they also guarantee payments and have become a critical instrument for helping

entrepreneurs weather the economic recession. Credit cards enhance efficiency for small

businesses, and eliminate major costs that would otherwise fall on them if they had to establish

their own credit and billing systems. Costs related to potential employee theft are reduced or

eliminated with credit cards, and small businesses benefit from the rewards and innovations that

credit card company’s offer to cardholders. Small business owners should understand that the

businesses providing these benefits have every incentive to get the price right, and that

government price controls come with many costs and unintended consequences.

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Given that various retailers and other interests are leading the charge against the credit card

industry, it is ironic to note that retailers started the card payment industry in this nation in an

effort to expand sales and boost profits.

http://www.mastercard.com/us/company/en/docs/SBE_Council_Report.pdf

This article was all about the Benefits, Opportunities and Policy Debate. In this article

define the benefits of the credit card for the small business and industries.

Research Methodology

Our methodology involved gathering data by the questionnaires survey from the banking

credit card holder’s and managers of the banks .our research was based on qualitative research

and quantitative research. For this research we take two banks as sample. We select two banks as

sample and we used different sampling technique like probability sampling and non-probability

sampling.

The population is the card holders of well known banks of the Islamabad Pakistan for this

purpose we select randomly two banks Standard chartered Bank and Habib Bank Ltd which are

located in different areas of the particular city. For this research we used the demographic

concept some female client of the bank and of male clients. We were using that were the credit

card holders.

Actually data was of two kinds which are Primary data are those, which are collected a

fresh and for the first time and this happens to be original in character. Secondary data are those

data which have already been collected by someone else and which have already been used as

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per required. For our research we were using both kinds of data for primary data we were

conducting interview and survey research. For secondary research we were taking articles from

internet as an existing data.

For this purpose we use two sources to collect secondary data which are internally data

from the bank’s managers and employees and other one is externally which get from the various

publication of central, state and local Government about the credit card of these banks. Internet is

best sources for the data collection.

This refers to the numbers of items to be selected from the banks credit card holders a

sample. This is a major problem before the researcher. This size of population must be kept in

view for this also limits the sample size .The total size of the sample is 100 people which fills the

questionnaires and two managers from these banks for the interview about the credit card.

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Data collection

Primary data collected through sample survey from the banks managers and their credit card

holders. So for this purpose we have used the most popular tool of primary data collection

through direct communication with respondents. The tools we used for primary data were

questionnaire and interview.

A total of 100 responses were obtained, representing a 100 percent response rate in which

100 questionnaires collect from the both banks customers who use their credit cards.

The customers of both the banks are the interest population for us. The mainly focused or

targeted group for our study is the customers of these declared banks. Actually the customers are

targeted by us are those customers those have the facility of the credit cards. And they have the

use of credit cards in their daily transactions. The purpose of selecting those customers is to

know the actual affect of credit cards on their life, as they can give us better response as

compared to the employees who offer the use credit cards. For that purpose we conduct the

survey in the HBL and Standard Charted Bank, where we easily approached the target

respondents. The questionnaire was being administered by hand to the customers. The survey

was really easily conducted except the issue of time. Because some of the customers were having

the time problem that was the only limitation we faced during the whole survey.

Data was analyzed using procedures with in Microsoft Excel. The questionnaire

contained 5 likert scale questions. And some of the questions have more options and in last one

is open question. This variable was measured on a five-point likert scale anchored at five points.

The first point 1 anchor read “ strongly disagree” and second point anchor “disagree” and 3 point

anchor “Neutral” and 4 point anchor “Agree” and 5 point anchor “Strongly disagree” And for

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the getting the result we calculate these questions on their mark options used to check the

relation between these all.

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

Q: 1. Credit card is geared to make life easier for the consumer?

Q: 2. Credit card can increase the purchasing power of a person?

Q: 3.A credit card is more convenient to carry around as compared to cash?

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Q: 4. Credit cards are prone to security issues, especially when it comes to online transactions?

Q: 5. Credit cards impose interest rates and other applicable fees?

Q: 6. Transacting with the help of credit card is always beneficial in the long run?
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Q: 7.The main purpose of credit card is to be used instead of money?

Q.8 credit cards can help for emergencies?

Q.9. Credit cards could be harmful if they are being used illegal?

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Q.10 Overall, how satisfied are you with credit cards?

Q.11 How often do you use credit cards?

Conclusion

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Interview data analysis

Our group chancellors has conducted interview for the purpose of gathering information.

For that reason we visit our targeted and particular banks Habib bank limited and Standard

Chartered Bank. Here we ask same question from the bank managers about the issues of credit

cards. We also ask question about its advantages and disadvantages of credit cards. We conduct

interview from 2 managers. For the interview we asked same questions from both interviewees

and they are Ayesha Bilour Branch Manager of HBL and Ali Iqbal Manager of Standard

chartered. In this interview Ayesha Bilour told about the measure to avoid the risk takes the help

form Credit Information Bureau (CIB). And she also told that Credit cards have more advantages

then disadvantages and risk of cash to bank like some time people did not pay back the cash

some of them become general defaults. In second interview Mr. Ali Iqbal told about that low

percentage people use credit cards in Pakistan but in other countries like USA and Europe have

all the transaction is done through credit cards. Plastic money is safer than cash money and banks

issue credit cards to earn profit. He also told about that if customer did not pay back the money

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this is a drawback for bank perspective then Bank will take that person to banking court and

legal court. The response which the interviewees give us a satisfied answers.

This research survey was taken for the purpose of getting the actual findings about “the

pros and cons of Credit Cards system and how these issues can be minimized in HBL and

Standard Charted Bank?” the important area of this study was the comparison of HBL and

Standard Charted Bank on the basis of the usage of credit cards by their customers. The

customers of both the banks were the interest population for us. The mainly focused or targeted

group for our study was the customers of these declared banks. Actually the customers were

targeted by us were those customers those have the facility of the credit cards. And they have the

use of credit cards in their daily transactions. The purpose of selecting those customers were to

know the actual affect of credit cards on their life, as they can give us better response as

compared to the employees who offer the use credit cards. For that purpose we conduct the

survey in the HBL and Standard Charted Bank, where we easily approached the target

respondents. The questionnaire was being administered by hand to the customers. The survey

was really easily conducted except the issue of time. Because some of the customers were having

the time problem that was the only limitation we faced during the whole.

The survey contains the general information about the subject. However from the

findings of our survey we can conclude that the maximum no of respondents were agree with our

given questions. That indicates that our research was going in a right direction. With few

limitations we conduct the survey as per the time given.

Conclusion

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As customer is the most important person in any business customer is actually not

dependents upon us we are dependent upon him. Customer is life blood for business; hence it’s

necessary to understand the credit card system. This research can implement only for the credit

sector and they willing to provide credit on better rules and condition to their customers.

There are some positive points that justify our research and made our research result

fully. Firstly our research will beneficial for banks because we will conduct survey from

customers that will helpful for banks that we take it as sample. Secondary in our research we will

highlight both the advantages and disadvantages of credit card system. Our study also focuses on

issues of credit card system which are facing by the banking customers. Another object of this

research is to see what percentage of customer using the cards and how many pay back the debt

of the bank. And form the bank point of view the bank can issues cards on for the money

generation for the card holders.

Our research was focused on the customers who use the facility of credit cards and the

employees who provides the facility and the comparison of both the banks as well. From the

start of the problem statement to the conclusion the almost four month’s research indicates the

desired results. We assume in the start that we will get the positive results as the consumers of

the credit cards more agree with their usage. We come to this result with the help of a survey

conducted in the area of the HBL and Standard Charted Bank. The survey contains the general

information about the subject. However from the findings of our survey we can conclude that the

maximum no of respondents are agree with our given questions. The interview also conducted

for the purpose of getting the experts views. The study is the beneficial for the customers that

they understand the pros and cons of credit card system. According to our research we analyze

that standard chartered bank is the best that facilitate their users or customers.

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According to the theme of our research a credit card is part of a system

of payments named after the small plastic card issued to users of the system. It is a card entitling

its holder to buy goods and services based on the holder's promise to pay for these goods and

services. The issuer of the card grants a line of credit to the consumer from which the user can

borrow money for payment to a business. Usage of the term "credit card" to imply a credit card

account is a metonym.

We also define the pros and cons of credit card systems. First of all advantages of credit

cards are it is convenience to paying at the store, at the pump and anywhere which we can use

the card. Second advantage is a reward it means one of the greatest parts to credit cards is

reaping the rewards for your spending habits.

The key part to using a credit card to build credit is keeping up with payments. Having a

credit card does no good if you fall behind on payments or rack up an unconscionable amount of

debt. Acting responsibly on your account, however, will help you build a credit score that

reflects dependability and accountability. By far, the most dangerous part of credit cards is not

paying them off on time, and for many, this problem is a constant temptation despite its obvious

negative consequences. Another disadvantage is Debt. It means that often as a result of late

payments, many people find themselves sunk in credit card debt with no way out. Many times,

credit card companies will say or do whatever it takes to get you to sign your name on their

application. Of course, once that ink has dried up, they will suddenly remember to tell you about

startup fees and processing fees that you never saw coming.

List of References

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Saleem Chohan, Spend and Save on HBL Credit Card from

http://pktaxal.com/blog/2009/06/20/spend-and-save-on-hbl-credit-card/

Tanha Karim, Pakistan Credit Cards from Pakistan Economy Finance Banks News

http://www.friendsmania.net/forum/pakistan-economy-finance-banks-news/8826.htm

Unknown author, Standard Chartered credit cards- growing your purchase capability Retrieved

on Apr 28, 2009 from http://www.articlesbase.com/finance-articles/standard-chartered-credit-

cards-growing-your-purchase-capability-890540.html#ixzz0nwP6K6TZ

Jimmy Atkinson, Contactless Credit Cards Consumer Report. (2006), Retrieved on April 3, 2006

from (http://www.findcreditcards.org/reports/contactlessreport.pdf)

Manas Ratha, Massachusetts Institute of Technology, The Credit Card Model Retrieved on

October 2001 from (http://sysdyn.clexchange.org/sdep/Roadmaps/RM9/D-4683-2.pdf)

Timothy P. Cahill, Credit Card caution Retrieved on Fall 21, 2007 from The New England

Journal of Higher Education,

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(http://web.ccsu.edu/studentaffairs/orientation/fall%2007%20pdfs/financial%20literacy

%20article%2010.10.07.pdf)

Mattson, Sahlhoff, Blackstone, Blackstone, and Y. Nahm, Variables Influencing Credit Card

Balances of Student at a Midwestern University Retrieved on 2004 from Nasfaa Journal of

student financial aid

http://www.nasfaa.org/Annualpubs/Journal/Vol34n2/Mattson.pdf

Kenneth R. Harney, some credit card issuers keep important data secret Retrieved on Saturday,

October 23, 2004 from Washington post,

http://www.legis.wi.gov/senate/sen27/news/HHSC/2008/INSURANCE%20CREDIT

%20SCORING-6.pdf

Unknown author, Credit card policy Retrieved on October 22, 2009 from Adopted by Library

Board of Trustee https://docs.google.com/viewer?

url=http://www.nols.org/_source/docs/Policies/8-5-credit-card-policy.pdf

Sankarson Banerjee, Credit card security on the Net: Where is it today? From Journal of

financial transformation https://docs.google.com/viewer?

url=http://www.mphasis.com/pdfs/Shanky_article.pdf

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Credit card issues

Raymond J. Keating, Credit Cards and Small Business Retrieved on March 2009 from

http://www.mastercard.com/us/company/en/docs/SBE_Council_Report.pdf

Appendixes

I-Questionnaire

Mohammad Ali Jinnah University

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Islamabad Campus

We are the students of management at ‘Mohammad Ali Jinnah University’. The

questionnaire is a requirement for our business research course name ‘Business Research and

Report Writing’. We are extremely thankful for your cooperation.

Topic:

What are the pros and cons of credit card system, how can these issues be minimized in

HBL and Standard Chartered.

Gender: Male/Female

Age: _____________

20-25 26-30 31-35 36-40 41-45 46-50 51 Above

Instructions:

1. Circle your desired answer.

2. Avoid over writing.

Questions:

Q: 1. Credit card is geared to make life easier for the consumer

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

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Q: 2. Credit card can increase the purchasing power of a person.

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

Q: 3.A credit card is more convenient to carry around as compared to cash.

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

Q: 4. Credit cards are prone to security issues, especially when it comes to online transactions

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

Q: 5. Credit cards impose interest rates and other applicable fees

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

Q: 6 Transacting with the help of credit card is always beneficial in the long run.

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

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Q: 7.The main purpose of credit card is to be used instead of money.

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

Q.8 Credit cards can help for emergencies

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

Q.9. Credit cards could be harmful if they are being used illegal.

1 2 3 4 5

Strongly Disagree Disagree Neutral Strongly Agree

Q.10 Overall, how satisfied are you with credit cards?

• Very Unsatisfied

• Unsatisfied

• Somewhat Satisfied

• Very Satisfied

• Extremely Satisfied

Q.11 How often do you use credit cards?

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• Daily

• Once/week or more

• 2 to 3 times a month

• Once/month

• Every 2-3 months

• 2-3 times a year

• It varies

Q.12 What recommendations would you offer for improving the services of credit card?

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Interview script

We are the students of Muhammad Ali Jinnah University and we conducting the survey

on the topic of “prons and cons of credit card system and who these issues will be minimized in

HBL and standard charted. We conduct this research because this research is our course Business

Research and Report Writing requirement the information which you will provide us it will be

useful for our research project. We are thankful to you for the conducting of this interview.

Questions

Q. Why banks issue credit cards?

Q. Why banks called people to purchase credit cards?

Q. What kind of drawbacks credit cards have?

Q. What measures are taken by banks to avoid those risks?

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Q. Does Credit card system has more advantages or disadvantages?

Q. Which class mostly uses credit cards?

Interviewees

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Time line

Sr No Project Activities in weeks Number of Weeks

1 Select the Research Question( Primary 1st week of the February


Question, Secondary Questions)

2 Presentation of The Research Question 2nd week of the February

3 Submit ion of research proposal and 2nd week of the March


presentation

4 Talk about the literature review 3rd week of the March

5 Presentation of Literature Review 1st week of the April

6 Qualitative Analyses: Interviews 2nd week of the April


Script Design

7 Conduct the survey and interviews 3rd week of the April

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8 Present the summary of interview 4th week of the April

9 Present the whole survey data 2nd week of the May

10 Submit the final research report 3rd week of the May

11 Final presentation of research report Last week of the May

41