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

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 alk
Celil Koparal (Prof. Dr.)
Anadolu University Faculty of Economics and Administrative Sciences
Department of Business Administration
Yunus Emre Campus 26470 Eskiehir/TURKEY
Phone: ++90 2223350580-2101 Fax: ++90 2223350595
E-mail: ckoparal@anadolu.edu.tr
Nuri alk (Prof. Dr.)

Anadolu University Faculty of Economics and Administrative Sciences
Department of Business Administration
Yunus Emre Campus 26470 Eskiehir/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;
Eskiehir 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 1 represents strongly disagree; 2 disagree; 3 neither
agree nor disagree; 4 agree and 5 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
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International Journal of Social Sciences Vol. III (4), 2014
1. 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 third-
party 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 Ko
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
Table 1. 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 Any of these ATM 1 Debit card Direct Automatic bill Software 2
household instruments deposit paying (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
Household income: 3
Low 74.3 79.7 46.8 58.8 29.2 48.1 51.9 60.5 18.2 23.8 6.1 7.7
income. . . . . . . . . . . .
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 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
degree. . . . . . .
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
Similarly the following table shows numbers of credit cards, number of holders, credit
card purchasing volume and credit card debt outstanding:
Table 2. Credit Card Usage in USA
Type of credit card Cardholders (mil.) Number of cards Credit card purchase Credit card debt
(mil.) volume(bill. dol.) outstanding (bill.
dol.)
2000 2009 2012, 2000 2009 2012, 2000 2009 2012, 2000 2009 2012,
proj. proj. proj. proj.
Total 1. 159 156 160 1,425 1,245 1,167 1,242 1,944 2,378 680 886 870
Visa. . . . . . . . . . . . . . 93 100 107 255 270 261 487 764 932 268 366 359
MasterCard. . . . . . . . 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 76 58 56 98 61 60 45 45 52 5 8 9
company. . . . . . . .
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
The Rest 2 . . . . . . . . . 133 105 81 192 137 106 18 5 5 5 3 2
In Turkey, credit card usage in numbers and purchase volume is as follows (Data
supplied from Tudkish Interbank Card Center) :
Table 3. Credit Card Types and Their Number by Years in Turkey
2001 2002 2003 2004 2005 2006 2007

Visa 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
Table 4. 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 doesnt
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.
2. 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 ones needs and means. Credit card usage is suggested as a moderating
78
variable between money attitudes (power, distrust and anxiety as independent variables)
and compulsive buying behavior (dependent variable (Robents and Jones, 216).
Fig 1. Relationship Between Money Attitudes and Compulsive Buying
Power
Compulsive
Distrust
Buying
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 2. Relationship Between Psychological Traits and Compulsive Buying
Self-Esteem
Credit Card Compulsive

Power Prestige
Misuse 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
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 pre-
purchase context, the greater the consumer propensity to seek information about the product.
In the marketing literature, Jacopy and Kaplans 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
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.
3. 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, Eskiehir 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 1. Variables and Their Explanations
Variable Explanation Mean SD

NOOFCARD Number of credit cards that you actively use 1.80 0.92
USEPERIO How long have you been using credit cards? 2.53 0.76
TOTALNUM What is the total limit for your credit card(s)? 2.54 1.39
MOSTPRAC What is your most common practice in using credit 1.41 0.80
cards?
PRODGROU Which of the following product groups or service types 3.04 2.56
that you spend most with your credit cards?
SECURITY Apart from user name and password (mobile password) 3.75 1.40
what type of security tools do you use while shopping
online:
COMPLAIN When you have a complaint about your credit card, 2.95 1.30
whom do you usually appeal?
CANCELLE If one or more of your credit cards are canceled in the 3.46 1,51
last two years, what is the main reason of this?
MAXLIMIT I like to use the maximum limit of my credit cards. 2.38 0.82
FULLPAYM I always pay off my credit card debt fully and timely. 1.83 1.39
AGITATED When payment date of my credit card(s) approaches, I 2.40 1,30
often get agitated.
NOCAREPR I don't care much about the price of a product when I use 3.87 1.18
my credit card(s).
SPENDMOR Using credit cards drive me to spend more. 2.67 1.28
AVOIDDEF I always avoid default on my loans of my credit card(s). 2.13 1.20
UNDERLIM I never go beyond my credit card(s) limit(s). 3.01 1.33
PRESTIGE I consider credit cards as a sign of prestige. 2.99 1.11
PREFCRCA I prefer credit cards, because they offer payment in 3.90 1.20
installments without charging interest.
81
FEELSECU I feel fully secure when I shop online with a credit card. 2.26 1.20
CONTREXP It is more difficult to control expenditures with credit- 4,01 1.01
card payment.
BUDGETLI My budget limits me from over-spending even if I use 2.53 1.25
my credit cards.
SIGNMODE I consider credit card usage as a sign of modernity. 3.35 1.19
CARELESS I don't care much about the price of a product when I use 3.69 1.20
my credit card.
RECKLESS I consider myself a bit reckless in taking risks. 2.70 1.31
REASNBLI The banks charge reasonable interest rates on credit cards 2.18 1.202.
(in case of default, partial payment, installment purchases
etc.).
OVERSPEN Credit cards lead people to overspending. 2,57 1.80
ADVANTAG Paying with credit card is always more advantageous 2.45 1.15
than paying with cash
SELFCONF It gives me self-confidence to pay with credit card when 3.71 1.11
I'm abroad.
EXCESSCA I believe that I have excessive credit cards. 3.28 1.13
NOMEMBRF I cancel the credit cards which require membership fees. 2.65 1.17
YEARNOLD I often yearn for the old days without credit cards. 1.96 1.14
FREEEXCS Credit card usage gives me the freedom of excess .360 1.26
spending.
INTRSTIN I am more interested in the amount of money people 2.39 1.12
have, rather than their success in their occupations.
IMPRESSO I often purchase things to impress the other people. 2.80 1.22
DREADEXC My habit of excess credit card usage often frightens my 1.79 1.06
family members.
LESSATTN I pay less attention to security when excitement and 1.72 1.01
adventure are under consideration.
MINIMDEB I developed the habit of paying the minimum debt on my 2,44 1,27
credit card(s) bills.
FEELBETT Spending money makes me feel better. 2.17 1.19
COMPULSI Sometimes I lose my control and do purchases that I 2.28 1.30
cannot afford with my credit card.
ESTIMABL I feel myself as an estimable person or at least not 2.72 1,23
inferior than the other people.
IMPULSIV I often act impulsive when I do my purchases with credit 2.30 1.23
cards.
AGE Age ( ) 1) 18-25 2) 26-40 3) 41-62 2.91 1.04
4) 62+
GENDER Gender ( ) 1) Female 2) Male 1.69 0,45
OCCUPATI Occupation ( ) 1) Wage or Salary Earner 2) 2.05 0.92
Tradesman/businessman 3) Self-employed, professional
or manager 4) Retired 5) Housewife 6) Student
EDCLEVEL Education Level (Last Graduated) 1) Elementary 1.55 0,50
2) High School 3) College or University
INCOME Monthly Household Income ($.) ( ) 1) 0-500 2.87 1.63
2) 501-1000 3) 1001-2000 4) 2001-4000
5) 4000+
82
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 3. 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 4. The Period that the Respondents are Using Their Credit Cards
How long have you been using credit cards?
Less than
one year
6,5
9,77% 9% 1-4 years
5-12 years
More than
12 years
43,18%
40,45%
__
Figure 5. Total Limit of the Respondents Cards
83
What is the total limit for your credit card(s)?
less than
3,
$500
64
7,0 % $501-1250
5%
$1251-2500
$2501-5000
28,41% $5001-
12,95%
10000
More than
$10000
21,25%
26,70%
__
Figure 6. 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 mail-
19,55% order
Online (by
internet)
1
78,52%
__
Figure 7. The Product Groups or Service Types that the Respondents Spend Most with
Their Credit Cards
84
Which of the following product groups or service types that

you spend most with your credit cards?
Store purchases
(food, detergents,
2 small household
, appliances, etc.)
3 Books, stationery,
9 vcd-dvd,
5,0 % magazines, etc.)
0% Clothing, shoes,
6,02 sunglasses,
accessories,
% sundries, etc.)
TV, cell-phone,
audio-video
systems, iphone,
41,36% ipad, computers
7,73%
(desktop, laptop,
notebook), mp3,
etc.
Cameras, handy
cams, printers,
optics, musical
instruments, etc.
Gas (for
28,64%
vehicles),
utilities (for
house), tax (all
direct taxes),
4, etc.
5
Hotel, restaurant,
travel, holiday,
entertainment,
etc.
__
Figure 8. 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 do you use while shopping
online:
Virtual
card
14,20% 3D Secure
I dont use
a security
tool
36,82% 9,55% I dont
shop
online
with
credit
card.
39,43%
__
Figure 9. The Appeal Point of the Respondents When They Have a Complaint About
Their Credit Cards
85
When you have a complaint about your credit card,

whom do you usually appeal?
To the
bank
directly
To local
authoritie
s
27,16%
To the
issuer of
the card
54,77% (Visa,
Master
5,45% Card, AMEX
etc.)
Point of
sale (of
12,61%
the
purchase)
__
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
13,98% cards so I
wanted to get
rid of some of
them.
The bank
charged
36,02% excessive
membership fee.
I did not make
23,07% use of that
(those) card(s)
for a long
time.
The bank
canceled it
(them) because
I did not pay
my debts
24,43% 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
H2. People who spend excessively with credit cards do 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 Psycho-

graphical Traits.
H6. Compulsive buying behavior is positively correlated with psycho-graphical traits as,
power, prestige, anxiety, self-esteem self-confidence and risk-taking.
4. Analyses and Results
Hypotheses Tests Results
H1 is sustained at most of the demographic traits

Bi- is hypotheses formulated in the previous
section are shown on the following tables:
Table 5. Relationship Between Consumer Demographics and Credit Card Usage

Behavior (*):
Consumer Demographics
Statements Age Gender Occupation Education Income
I like to use the maximum limit 41-62 female rejected rejected rejected
of my credit cards. 84.4 %
I always pay off my credit card rejected female wage and rejected $4000+
debt fully and timely. 76.6 % salary earner
When payment date of my 18-25 female retired rejected $2001-
credit card(s) approaches, I 4000
often get agitated. 63.3 %
I don't care much about the 26-40 female retired rejected $2001-
price of a product when I use 4000
my credit card(s). 69.5 %
Using credit cards drive me to 18-25 female rejected college or rejected
spend more. university
51.2 % (*)
I always avoid default on my 18-25 female retired Elementary $0-400
loans of my credit card(s). and high
71.7 % school
I never go beyond my credit 18-25 female retired rejected $2001-
card(s) limit(s). +62 male wage and 4000
42.5 % 44.0% salary $1001-
earner 2000
I consider credit cards as a sign 26-40 female retired rejected $2001-
87
of prestige. 74.3 % 4000

I prefer credit cards, because +62 female retired rejected $2001-
they offer payment in 4000
installments without charging
interest. 73.5 %
I feel fully secure when I shop 41-62 female Self rejected $2001-
online with a credit card. employed 4000
65.0 % professional
or manager
(*)
It is more difficult to control +62 Male Rejected rejected Rejected
expenditures with credit-card
payment. 80.1 %
My budget limits me from over- 18-25 female retired elementary $2001-
spending even if I use my credit & high 4000
cards. 49.8 % school
I consider credit card usage as 62+ Male tradesman/ elementary rejected
a sign of modernity. 54.0 % businessman & high
school
I don't care much about the 62+ female Retired rejected $2001-
price of a product when I use 4000
my credit card. 66.1 %
I consider myself a bit reckless 18-25 female Self rejected Rejected
in taking risks. 49.6 % male employed
professional
or manager
retired
The banks charge reasonable 18-25 female retired rejected $2001-
interest rates on credit cards (in 4000
case of default, partial payment,
installment purchases etc.).
71.1 %
Credit cards lead people to 18-25 female retired rejected $2001-
overspending. 54.5 % 4000
Paying with credit card is 18-25 female rejected rejected Rejected

always more advantageous than (*)
paying with cash 55.5 %
It gives me self-confidence to 62+ Male tradesman/ rejected $1001-
pay with credit card when I'm businessman 2000
abroad. 78.3 %
I believe that I have excessive 62+ Male Rejected college & $1001-
credit cards. 47.2 % university 2000
I cancel the credit cards which 18-25 female retired rejected $2001-
require membership fees. (*) 4000
43.1 %
I often yearn for the old days 62+ female wage and elementary $4000+
without credit cards. salary earner & high
78.5 % school (*)
Credit card usage gives me the 62+ female Rejected Rejected $2001-
88
freedom of excess spending. 4000

61.0 % $501-
1000
I am more interested in the 26-40 rejected tradesman/ Rejected $4000+
amount of money people have, businessman (*)
rather than their success in their
occupations. 60.5 %
I often purchase things to 18-25 female retired Rejected $2001-
impress the other people. male tradesman/ 4000
47.3 % businessman $501-
1000
My habit of excess credit card 18-25 female retired Rejected $2001-
usage often frightens my family 4000
members. 80.5 %
I pay less attention to security 18-25 female retired rejected $2001-
when excitement and adventure 4000
are under consideration.
83.9 %
I developed the habit of paying 18-25 female Self rejected rejected
the minimum debt on my credit employed
card(s) bills. 63.1 % professional
or manager
Spending money makes me feel 18-25 female retired elementary $2001-
better. 70.9 % & high 4000
school (*)
Sometimes I lose my control 18-25 female retired rejected $2001-
and do purchases that I cannot 4000
afford with my credit card.
67.6 %
I feel myself as an estimable 18-25 female retired college & $2001-
person or at least not inferior university 4000
than the other people. 48.1 % $4000+
I often act impulsive when I do 18-25 female Self rejected $2001-
my purchases with credit cards. employed 4000
67.1 % professional
or manager
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 do purchases that they cannot afford with
89
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 6. Relationship Between Compulsive Buying Behavior and Overspending
Overspending Spending Within Credit Card Limits

Statements for Agree % Disagree % Agree % Disagree %
Compulsive Behavior Average Agree Average Disagree Average Agree Average Disagree
Spending money makes 25.7 % 80.0 % 54.5 % 12.9 % 25.7 % 9.7 % 54.5 % 76.3 %
me feel better
I often act impulsive 25.4 % 60.8 % 59.5 % 25.5 % 25.4 % 9.4 % 59.5 % 75.2 %
when I do my purchases
with credit cards
Sometimes I lose my 25.7 % 45.2 % 54.5 % 43.7 % 25.7 % 15.0 % 54.5 % 64.6 %
control and do purchases
that I cannot afford with
my credit card.
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 populations 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 <0.01 significance level) with compulsive buying
behavior.
Table 7. Relationship Between Compulsive Buying Behavior and Consumers

Psycho-graphical Traits.
Risk Taking Prestige

me feel better (*) (*)
I often act impulsive 31.4 % 45.1 % 49.6 % 43.1 % 74.3 % 45.1 % 13.4 % 432 %
when I do my purchases (*) (*)
with credit cards
Sometimes I lose my 31.4 % 24.7 % 49.6 % 64.4 % 74.3 % 48.0% 13.4 % 6.2 %
control and do purchases (*) (*) (*)
my credit card.
Self-confidence Power
90
me feel better
I often act impulsive 68.3 % 86.3 % 16.8 % 11.8 % 35.5 % 80.4 % 47.3 % 15.72 %
with credit cards
control and do purchases
my credit card.
Self-esteem Excitement
me feel better
I often act impulsive 36.1 % 62.8 % 48.1 % 21.5 % 25.7 % 72.5% 63.3 % 27.5 %
with credit cards
control and do purchases (*)
my credit card.
Factor Analysis
An exploratory factor analysis applied on 32 variables on scale reduced them to 8

components as, price consciousness, prestige-power, online security, self-confidence,
overspending, default on payments, materialistic behavior and yearning for old days. The
following rotated component matrix table shows these factors clearly:
Table 8. Rotated Component Matrix
Rotated Component Matrix(a)
Component
1 2 3 4 5 6 7 8
1. PRICE CONSCIOUSNESS
The banks charge reasonable interest rates

on credit cards (in case of default, partial
payment, installment purchases etc.).
,825
I always avoid default on my loans of my

credit card(s). ,815
I often purchase things to impress the

other people. ,687
When payment date of my credit card(s)
approaches, I often get agitated.
,683
91
I prefer credit cards, because they offer

payment in installments without charging
interest. ,669
I never go beyond my credit card(s)

limit(s). ,666
Credit cards lead people to overspending.
,659
Spending money makes me feel better.
,649
I often act impulsive when I do my
purchases with credit cards. ,641
I don't care much about the price of a

product when I use my credit card. ,628
I feel myself as an estimable person or at

least not inferior than the other people.
,542
I developed the habit of paying the

minimum debt on my credit card(s) bills. ,417
2. PRESTIGE
I don't care much about the price of a

product when I use my credit card(s).
,737
I consider credit cards as a sign of

prestige. ,663
Sometimes I lose my control and do
purchases that I cannot afford with my
credit card. ,633
I always pay off my credit card debt fully

and timely. ,415
3. CARD SECIRITY
I consider myself a bit reckless in taking

risks. ,698
I feel fully secure when I shop online with
a credit card. ,646
I pay less attention to security when

excitement and adventure are under
consideration. ,624
My habit of excess credit card usage often

frightens my family members.
,619
92
4. SELF-CONFIDENCE
It gives me self-confidence to pay with

credit card when I'm abroad.
,668
I consider credit card usage as a sign of

modernity. ,630
I like to use the maximum limit of my

credit cards. ,461
5. OVERSPENDING
My budget limits me from over-spending

even if I use my credit cards. ,654
Using credit cards drive me to spend

more. ,573
I cancel the credit cards which require
membership fees. ,558
6. DIFFICULTY TO CONTROL
EXPENDITURES
It is more difficult to control

expenditures with credit-card payment. ,784
I believe that I have excessive credit

cards. ,633
7. MATERIALISTIC BEHAVIOR
Paying with credit card is always more

advantageous than paying with cash
,711
Credit card usage gives me the freedom of

excess spending. ,634
I am more interested in the amount of

money people have, rather than their
success in their occupations. ,482
9. NOSTALGIC BEHAVIOR
I often yearn for the old days without

credit cards. ,828
Extraction Method: Principal Component Analysis.

Rotation Method: Quartimax with Kaiser Normalization.
a Rotation converged in 11 iterations.
93
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling

Adequacy. ,891
Bartlett's Test of Approx. Chi-Square 9986,867

Sphericity df 496
Sig. ,000
Reliability Statistics
Cronbach's
Alpha N of Items
,746 32
5. Findings
This study reveals that almost half of the consumers own only one credit card, and 20 % of
them use kore than three cards. Card users are almost divided equally in terms of the period
they are using their cards (less than four and more than five years). The majority of the card
users (54 %) have a total card spending limit of $1200 or less. On the other hand the highest
94
limit of $5000 or more is granted to only 5 % of the population. There is also a new
govevnment regulation imposed on this top limit that it would not exceed the total montly
income of the persons.The usage of credit cards is divided ino two groups. The majority of the
people (80 %) use POS terminals in their spendings and the rest (20 %) submit their cars
online.The fraud on POS terminals is also seen but not so widespread where consumers are
warned to enter their information directly by themselves but not through intermediadies.
Credits cards are mostly (41 %) used for grocery spendings (Foodstuffs, detergents, small
house appliances etc.). Clothing, sunglasses, accessories, shoes etc. take the second place.
Apart from user-name and password the majority of the consumers (62 %) do not need to use
another security tool while shopping online. On the other hand 23 % of the respondents use
virtual cards and 15 % 3-D secure system. Any claims or complaints about the credit cards
is mostly directed to the point of sale authorities (55 %); rather than the bank or the issuer of
the card (27 %) The most important reason for the cancelled cards in the past two years is that
the consumers could not be able to pay their debts regularly (36 %). The other resons are,
long idle time of not using the credit card 24 %) and the desire of the consumers to get rid of
their excessive cards (23 %). The great majority of the card-holders do not use the maximum
limit of their cards (85 %) and oly 3 % who do so... This is escepially true for those
consummers with lower incomes. People who achieve to pay their credit card debts fully and
timelyare not so many (17 %). 77 % of such people fail in this respect. Accumulation of debt
causes many defaults of payment and many cases are brought to lawcourts in this
respect.26 % of the consumers get excited as the due date of tneir cards approaches. On the
other hand 63 % of them do not care much about this matter. Psychographical factors play
less and people prefer to steay calm. The consumers who pay less attention to the prices of the
products and services as long as they use credit cards is around 70 %. A minority of 18 %
rejects this idea. This does not prove that credit card users are less sensitive to price in all
their spendings but there is an evidence that they act more free when using using credit cards
than when they spend out of pocket. 74 % of the population sees credit cards as a symbol of
prestige. Only 13 % of them declines it. This was more evident in last decades when credit
card usage was not widespread so much as today. Granting installments to credit cards at the
purchases is favored by the people (73 %) . Only 19 % of the consumers oppose to this
situation. Installments are applied to all spendings regardless of their magnitude except
foodstuffs and other store items.Consumers do not have a complete trust to online shopping
by credit cards (65 %). People who have trust is only 19 % of the population. There are many
frauds and cheatingz in this respect, however less people prefer to use virtual cards and
similar care to avoid it. 80 % of the respondents believe that it is hard to control the
expenditures by using credit cards. Only 10 % of them rejects this idea. Postponing the
payment dates appear as an advantage to them. Only one fourth of the population thinks that
their budgets will not allow excessive spendings even they use credit cards. 50 % of the
people think the other way round. Rate of those who perceive the credit cards as a sign of
modernity is 55 %. 29 % of the consumers rejects it. People who regard the interest on default,
partial payment, commission on service etc. As reasonable do not exceed 19 %. A majority of
74 % do not accept this idea. People do not accept the proposition that spending with credit
cards is more advantageous than spending with cash (56 %). Only 23 % of them accepts this
proposition. Those who think that spending abroad by credit cards grants them self-
confidence consist 68 % of the population. Those opposing to this idea remains at 17 %, and
47 % of the consumers think that tey own excessive number of credit cards. 25 % of them do
not adopt this idea. Only a minority of the consumers cancelled their cards because of high
membership fees (24 %). This action is not favored by 43 % of the consumers. Membership
fees are restricted recently to certain conditions by law. 79 % of the consumers support credit
card usage. Those who yearn for the good old days without credit cards are not many
95
(14 %). . These are especially elder and retired people. Complsive buying behavior is
significantly and positively related with overspending and with, risk-taking, power-seeking,
self-confidence, self-esteem and excitement. On the other hand no statistical evidence is
found between compulsive buying behavior and prestige-seeking. A significant positive
relationship is found betwen compulsive buying behavior and price sensitivity, where price
conscious consumers agreed with the idea that using credit cards drive them to spend more
and they admit (strongly agree) that they lose control from time to time and do purchases that
they cannot afford with their credit card. (an inverse conclusion of what was expected while
formulating the hypothesis).
References
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Foscht Thomas, Maloloes Ceasar III, Swoboda Bernhard and Chia Swee-Lim, Debit and
Credit Card Usage and Satisfaction, IJBM, 28,2
Goyal, Anita, Managing Perceived Risk for Credit Card Purchase through
Supplementary Services Journal of Financial Services Marketing, Vol. 12, 4 331345
Jacob Jacoby and Leon B. Kaplan,"The Components of Perceived Risk", in SV -

Proceedings of the Third Annual Conference of the Association for Consumer Research, eds.
M. Venkatesan, Chicago, IL : Association for Consumer Research, 1972 Pages: 382-393.
Johnson, Tricia and Attman, Julianne, Compulsive Buying in a Product Specific Context:
Clothing, Journal of Fashion Marketing and Management, Vol. 13 No. 3, 2009
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Purchase: A Cross-Validation, Journal of Applied Psychology, Vol. 59 No. 3, 1974,, pp.
287-91.
Khare Arpita, Khare Ansshuman, and Sing Shveta, Factors Affecting Credit Card Use in
India, APJML
24,2
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Card Usage as an Alternative Payment and Financing Medium, The Journal of
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Acquisition Activities, Journal of Marketing, Vol.55, pp.1q0-25
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Palan M. Kay, Paula C. Morrow, Allan Trapp, II, and Virginia Blackburn, Compulsive
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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

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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

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International Journal of Social Sciences Vol.

III (4), 2014

Bank credit card usage behavior of individuals; are credit cards

Nuri alk (Prof. Dr.)

Table 1. Payment Instruments in USA

Table 2. Credit Card Usage in USA

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

The Rest 2 . . . . . . . . . 133 105 81 192 137 106 18 5 5 5 3 2

Table 3. Credit Card Types and Their Number by Years in Turkey

2001 2002 2003 2004 2005 2006 2007

2001 2002 2003 2004 2005 2006 2007

2. Theoretical Background and Prior Research

2.1 Compulsive Buying Behavior and Credit Card Usage

Fig 1. Relationship Between Money Attitudes and Compulsive Buying

Fig 2. Relationship Between Psychological Traits and Compulsive Buying

Credit Card Compulsive

2.2 Store and Debit Cards as complimentaries of Credit Cards

3. Research Model and Hypotheses

Table 1. Variables and Their Explanations

Variable Explanation Mean SD

Frequency Charts for the First Eight Questions on Nominal Scale

Figure 3. Number of Credit Cards that Respondents Actively Use

Number of credit cards that you actively use

How long have you been using credit cards?

Figure 5. Total Limit of the Respondents Cards

What is the total limit for your credit card(s)?

What is your most common practice in using credit

Which of the following product groups or service types that

Apart from user name and password (mobile password)

When you have a complaint about your credit card,

If one or more of your credit cards are canceled in

Several research hypotheses are formulated and tested as follows;

a. Relationship Between Consumer Demographics and Credit Card Usage

H1 : There are statistically significant differences between the consumer demographics

b. Relationship Between Price Sensitivity and Shopping With Credit Cards.

c. Relationship Between Compulsive Buying Behavior and Overspending

d. Relationship Between Compulsive Buying Behavior and Consumers Psycho-

4. Analyses and Results

Hypotheses Tests Results

H1 is sustained at most of the demographic traits

Table 5. Relationship Between Consumer Demographics and Credit Card Usage

of prestige. 74.3 % 4000

Paying with credit card is 18-25 female rejected rejected Rejected

freedom of excess spending. 4000

H2 is tested and is not sustained at both significance levels,

Table 6. Relationship Between Compulsive Buying Behavior and Overspending

Overspending Spending Within Credit Card Limits

Agree + Strongly Agree

H6 is accepted for most of the psycho-graphical traits except prestige. Consequently,

Table 7. Relationship Between Compulsive Buying Behavior and Consumers

Risk Taking Prestige

An exploratory factor analysis applied on 32 variables on scale reduced them to 8

Table 8. Rotated Component Matrix

Rotated Component Matrix(a)

The banks charge reasonable interest rates

I always avoid default on my loans of my

I often purchase things to impress the

I prefer credit cards, because they offer

I never go beyond my credit card(s)

I don't care much about the price of a

I feel myself as an estimable person or at

I developed the habit of paying the