Usage Pattern of Credit Cards - September 8th, 2010

Introduction
Credit card is part of a system of payments named after the small plastic card i
ssued 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 (or the user) from wh
ich the user can borrow money for payment to a merchant or as a cash advance to
the user.
A credit card is different from charge card, where a charge card requires the ba
lance to be paid in full each month. In contrast, credit cards allow the consume
rs to 'revolve' their balance, at the cost of having interest charged. Most cred
it cards are issued by local banks or credit unions, and are the shape and size
specified by the ISO/IEC 7810 standard as ID-1.
Credit cards usage in India still low: survey
The Indian credit cards industry is still in a relatively nascent stage when com
pared to economies in West Asia, a survey by MasterCard International has found.

According to the survey results, only 14 per cent of Indians currently own a cre
dit card. This is in sharp contrast to countries such as the United Arab Emirate
s and Kuwait where 63 per cent and 50 per cent of respondents, respectively, own
a credit card. The results indicate the high growth potential for the payment c
ard industry in India, the survey says.
It further finds that 73 per cent of Indians spend less than $35 on an average e
ach month, while 25 per cent spend between $35 and $300. Only two per cent of In
dians spend over $300 on their credit cards during a month. On the other hand, o
nly six per cent of cardholders in the UAE have an average monthly spend below $
35, whilst 58 per cent of cardholders in the UAE have an average monthly spend o
f over $300, MasterCard International's Consumer Lifestyle survey in the South A
sia, Middle East and Africa Region (SAMEA) found.
The usage of credit cards by Indians is also much lower than their Asian counter
parts. Seventy-two per cent of Indians use their credit cards 1-2 times (or less
) a month, while 23 per cent of Indians use their cards between 3-5 times and th
e remaining 5 per cent use cards 6 times or more every month. In the UAE, 31 per
cent of cardholders use their cards more than 10 times during a month, while on
ly 15 per cent use their cards 1-2 times (or less).
Meanwhile in India, 44 per cent of cardholders use their credit cards most often
for purchase of clothing, 14 per cent for supermarket/grocery shopping, 9 per c
ent at hotels and 6 per cent at restaurants. In the other six countries surveyed
, the majority of cardholders use their card most often for supermarket/grocery
shopping.
In terms of the single most important factor influencing choice of credit card,
30 per cent of Indians say they are influenced by the credit card brand, closely
followed by 23 per cent who choose a credit card depending on the credit limit.
Interestingly, 8 per cent of cardholders say they are influenced by the card de
sign, while only 5 per cent and 2 per cent cardholders say they are influenced b
y the interest rate and the bank staff recommendations respectively.

Objectives Of the Study

Understand the customer satisfaction level of the credit cards.

Marketing strategies adopted by credit cards (Banks).
 Various factors which make the customers to usage credit cards.

Description Of the problem

The main motive of the study is to find the usage pattern of credit cards amongs
t customers. This will help in understanding the customer preference in relation
to various credit cards players in the market. It will basically help to unders
tand the expectation of the customers from the respective credit cards (Bank). T
he study will also help to determine the effectiveness as there are many players
(Banks) of credit cards in the market, so the study will help to find what are
the major factors which motivate the customers to go for the use credit cards di
fferent pattern in city of Mumbai.
Justification for the proposed study
The study will help the factors may be price, promotions, references etc which h
elps the customer to go for the credit cards. The study will help to find the ef
fectiveness of the strategies which are adopted by various Banks which helps in
the decision making for going for the credit cards.

DATABASE

The customers from Mumbai, who usage different types of credit card such as ICIC
I BANK, HDFC BANK, CITY BANK etc.
The total sample size would be 100
Data will be collected with the help of the questionnaire with the customers. Th
is will generate the information regarding the impact on the usage pattern of cr
edit cards and also their satisfaction level.
Data
Primary data will be collected through structured closed ended questionnaire and
secondary data from various sites for literature review. Secondary data would a
lso help in finding out the recent research made.
The Sample
The sampling technique will be random sampling method. For the present study, da
ta will collect with the help of structured questionnaires from the 100 customer
s using credit cards of Mumbai.

Methodology/Analytical Problem
This research consists of primary and secondary research:
Primary:-
Interacting with customers by filling up of questionnaires.
Questionnaire Type :-
Open Ended Questions
Close Ended Questions
Ranking Questions
Secondary:-
1. Books
2. Internet
3. Articles
4. Magazines/ Project Reports
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