A PRESENTATION ON

CUSTOMER PREFERNCE OF CREDIT CARDS OFFERED BY BANKS IN JAIPUR CITY

Made by Pooja Agarwal FMS Trimester 2nd

INTRODUCTION
A credit card is a widely used tool in personal finance that is part of a system of payments named after the small PLASTIC CARD issued to cardholders, who have the authorization to purchase goods and services up to a predetermined amount, called a CREDIT LIMIT. The vendor receives essential credit card information from the cardholder, the bank issuing the card actually reimburses the vendor, and eventually the cardholder repays the bank through regular monthly payments. If the entire balance is not paid in full, the credit card issuer can legally charge interest fees on the unpaid portion. A credit card does give the holder an immediate credibility for services such as hotel reservations, car rentals and airline ticket reservations. A credit card holder can authorize other people to use the card for purchases or services, however. Ultimately, the primary cardholder is responsible for all charges placed on his or her account. In order to avoid excessive credit card debt, the holder must decide if the goods or services are worth the added expenses.

Objectives of the study

A critical study of Indian Banking sector, so as to understand the projected growth for credit card market in Jaipur city. To analyse the role of credit card as a means of personal finance and the factors influencing the preference of the same among retail consumers of Jaipur city. To understand the relative features benefits and purposes of few of the leading credit cards issued by banks in Jaipur city. Evaluating the credit cards in terms of the performance of the respective bank

RESEARCH METHODOLOGY
RESEARCH DESIGN

Research methodology section of this Project describes the method of procedure for conducting this study. It specifies what the problem is, sources and types of information, population and sample, procedures and techniques for collection and analysis of data. As this study aims to perform an analysis of the reasons for consumer preferences for credit cards in the Jaipur city by studying the most popular credit card features and from among four leading banks in the Jaipur city, namely HDFC Bank, ICICI Bank, IDBI Bank, and HSBC bank. These banks have been selected on the basis of the criteria of high repute and popular acceptability among Jaipur city consumers and convenient access to their array of accurate financial reports on their websites.

RESEARCH METHODOLOGY
A section-based questionnaire is to be prepared and tested upon a representative sample size of 50 consumers within the Jaipur city. This is to collect firsthand primary data to fulfil the objective of studying credit card preferences within the Jaipur city. Owing to time and cost constraints, the aim for a higher sample size is difficult to accomplish. For the purpose of critical studies and research, owing to time constraints and the easy availability of secondary data in the form of relevant financial websites, newspapers and, various references have been utilized.

Nature of data
For the purpose of this Project, both secondary data and primary data will be used. Primary data is authentic data and it will be collected from the Jaipur city and analyzed. The secondary data has been taken from various appropriate online and other references. The definitions and theoretical aspects of this Project represent secondary data collected from various sources such as websites and the library. Being aware of the limitations of dealing with secondary data in terms of relevance and validity, the available secondary data at hand has been as accurately presented as possible within the Projects constraints.

Source and Collection of Data

The Project is based on both primary and secondary data. The primary data has been taken from a convenient representative sample size of 50 banking customers within Jaipur city. The secondary data

has been taken from various appropriate online and other references.

Tools and Techniques of Analysis

The primary data is collected using the assistance of a questionnaire having certain open-ended questions and multiple-choice questions to allow for freedom of consumer opinion and broaden the scope of analysis. Bar-chart graphs have been used to analyze the percentages of consumers preferring certain credit cards over others to show the most preferred credit cards in the Jaipur city. Other such graphs will also show how many consumers make the minimum payment on their credit cards or use other personal finance approaches in settling their credit card bills. These graphs will then be used in analyzing what features and aspects of credit cards attract consumers to use them as the most popular source of personal finance and why credit card issuing companies are / are not gaining acceptance within the Jaipur city credit card market.

DATA INTERPRETATION & ANALYSIS

SHOWING GENDER WISE AGE PATTERN OF THE RESPONDENTS

Gender

Grand Total

Gender %

Grand Total

Female

Male

Female

Male

Less than 21

0%

0%

0%

22 - 30 Age Group

30

38

16%

60%

76%

31 - 40

4%

6%

10%

41 - 50

4%

0%

4%

51 - 60

0%

10%

10%

61 and above

0%

0%

0%

Grand Total

12

38

50

24%

76%

100%

SHOWING GENDER WISE AGE PATTERN OF THE RESPONDENTS

120% 100% 80% Female

60%
40% 20% 0% Less than 21 22-30 31-40 41-50 51-60 61-70 Total

Male Total

INFERENCE

76% of respondent were males and 24% were females. Of the respondents 76% belong to the age group less than 30. Only 14% were in the age group of above 41.

SHOWING GENDER WISE OCCUPATION OF THE RESPONDENTS

Occupation Grand Total Selfemployed

Gender

Manufacturing

Retail

Service

Student

Female

0%

0%

8%

12%

6%

24%

Male

12%

6%

6%

46%

4%

76%

Grand Total

12%

6%

14%

58%

10%

100%

SHOWING GENDER WISE OCCUPATION OF THE RESPONDENTS

120%

100%

80% Female 60% Male Total 40%

20%

0% Self employed Manufacturing Retail Service Student Total

INFERENCE 6% of respondents are employed within the retail sector are male respondents. 12% of respondents are employed within the manufacturing sector are male respondents 14% of all respondents are self-employed of whom 6% are male respondents

SHOWING GENDER WISE MONTHLY INCOME OF THE RESPONDENTS

Monthly Income

Gender

Less than Rs 5,000

Rs 5,000 Rs 10,000

Rs 10,000 Rs 20,000

More than Rs 20,000

Grand Total

Female

8%

14%

4%

0%

26%

Male

8%

38%

24%

4%

74%

Grand Total

16%

52%

28%

4%

100%

SHOWING GENDER WISE MONTHLY INCOME OF THE RESPONDENTS

120%

100%

80% Female 60% Male Total

40%

20%

0% Less than Rs 5,000 Rs 5,000- Rs 10,000 Rs 10,000-Rs 20,000 More than Rs 20,000 Total

INFERENCE

The above table shows that 80% of all respondents are in the monthly income range of Rs5,000 Rs20,000 out of whom 18% are female respondents and 62% are male respondents. 4% of all male respondents are in the monthly income range of more than Rs 20,000. 16% of all respondents are in the monthly income range of less than Rs 5,000.

SHOWING GENDER WISE MONTHLY EXPENSES OF THE RESPONDENTS

Monthly Expenses

Gender

Less than Rs 3,000

Rs 3,000 Rs 6,000

Rs 6,000 Rs 10,000

More than Rs 10,000

Grand Total

Female

14%

12%

0%

0%

26%

Male

30%

26%

14%

4%

74%

Grand Total

44%

38%

14%

4%

100%

Showing Gender wise monthly expenses of the respondents

120%

100%

80% Female 60% Male Total 40%

20%

0% Less than Rs 3,000

I

Rs 3,000- Rs 6,000

Rs 6,000- Rs 10,000

More than Rs 10,000

Total

INFERENCE

The above table shows that 82% of all respondents incur average monthly expenses less than Rs 6,000 of whom 26% are female respondents and 56% are male respondents. 14% of male respondents incur average monthly expenses range between Rs 6000 - 10000. 4% of male respondents incur average monthly expenses range between Rs 6000 10000.

Showing mode of payment according to the monthly income of the respondents

Mode of payment

Monthly Income
Less than Rs 5,000 Rs 5,000 Rs 10,000 Rs 10,000 Rs 20,000 More than Rs 20,000 Grand Total

Cash
7% 22% 12% 1% 42%

Cheque
1% 2% 2% 1% 6%

Credit Card
4% 20% 7% 2% 33%

Debit Card
4% 8% 7% 0% 19%

Grand Total
16% 52% 28% 4% 100%

Showing mode of payment according to the monthly income of the respondents

120%

100%

80%

Less than Rs 5,00 Rs 5,000- Rs 10,000

60%

Rs 10,000- Rs 20,000
More than Rs 20,00

40%

Total

20%

0% Credit card Debit card Cash Cheque Total

Inference

33% of respondent prefer credit card as mode of payment 52% respondent fall under Rs 5000 - 10000 income group Cheque is the least preferred mode of payment.

Showing Gender wise reasons for preference of a credit card over other personal finance options of the respondents

REASONS FOR PREFERENCE OF A CREDIT CARD OVER OTHER PERSONAL FINANCE OPTIONS

Gender Female Male Grand Total

Convenient access to liquid cash 12% 35% 47%

Ease of obtaining loans 0% 14% 14%

Loyalty incentives 12% 27% 39%

Grand Total 24% 76% 100%

Showing Gender wise reasons for preference of a credit card over other personal finance options of the respondents
Inference

120%

100%

The above table shows that 47% of all respondents cite convenient access to liquid cash as their reason for preference of credit cards over other alternatives as a personal finance tool out of whom 35% are male respondents and 12% are female respondents. 39% of all respondents cite loyalty incentives associated to credit card usage as their reason for preference of credit cards as a personal finance tool out of whom 27% are male respondents and 12% are female respondents. 14% of male respondents cite ease of obtaining loans using credit cards as their reason for preference of credit cards as a personal finance tool.

80%

60%

Female Male Total

40%

20%

0% Ease of obtaining Convenient access Loyalty incentives loan to liquid cash Total

Showing gender wise frequency of using of credit cards of the respondents

FREQUENCY OF USAGE OF CREDIT CARDS

Any purchase Female 14%

Only air-ticket booking 2%

Only week-end shopping 8%

Grand Total 24%

Male
Grand Total

38%
52%

20%
22%

18%
26%

76%
100%

Showing gender wise frequency of using of credit cards of the respondents

INFERENCE

120%

100%

The above table shows that 24% of female respondents have cited the following frequency of credit card usage(in order of preference) For any purchase Only weekend shopping Only air-ticket booking. 76% of male respondents have cited the following frequency of credit card usage(in order of preference) For any purchase Only air-ticket booking. Only weekend shopping

80%

60%

Female Male Total

40%

20%

0% Any purchase Only week-end shopping Only air-ticket booking Total

Showing gender wise approach adopted by the respondents for settling credit card bills

APPROACH ADOPTED FOR SETTLING CREDIT CARD BILLS

Gender Female Male Grand Total

Fixed payment every month 8% 10% 18%

Full repayment within 50 days of purchases, interest-free 8% 42% 50%

Less than the minimum payment required 2% 6% 8%

Minimum payment required only 6% 18% 24%

Grand Total 24% 76% 100%

Showing gender wise approach adopted by the respondents for settling credit card bills
Inference

120%

100%

80%

The above table shows that 24% of female and 76% of male respondents have cited the following adopted approaches for settlement of their credit card bills (in order of preference) a. Full repayment within 50 days of purchases, interest-free c. Minimum payment required only b. Fixed payment every month d. Less than the minimum payment required

60%

Female
Male Total 40%

20%

0% Less than the Minimum Full Fixed payment minimum payment repayment of every payment required only within 50 days month required of purchase, interest free Total

Showing gender wise common problems / complaints regarding credit cards

Gender COMMON PROBLEMS / COMPLAINTS REGARDING CREDIT CARDS Difficult to qualify for an initial credit card Frequent out of service in ATMs Hidden financial charges Lesser acceptability at retail outlets Poor customer service Grand Total Female 1% 3% 8% 7% 5% 24% Male 7% 12% 32% 14% 11% 76% Grand Total 8% 15% 40% 21% 16% 100%

Showing gender wise common problems / complaints regarding credit cards

120% 100%

80%

60%

Female Male

40%

Total

20%

0%
Lesser Frequent out of Hidden financial Difficulty to Poor customer acceptability at service in ATM's charges qualify for an care retail outlets initial credit card Total

INFERENCE

The above table shows that 40% of respondents (32% male and 8% female) have cited hidden financial charges as common problem regarding credit card. 11% male and 5% female cited poor customer service as major complaint.

Showing pattern of credit card usage with the frequency of usage of credit cards by the respondents.

Gender
PATTERN OF USAGE OF CREDIT CARDS Dining Education Entertainment Leisure Shopping Travel Utility Bills settlements Grand Total Female 4% 4% 1% 2% 6% 1% 6% 24% Male 15% 9% 11% 10% 12% 9% 10% 76% Grand Total 19% 13% 12% 12% 18% 10% 16% 100%

Showing pattern of credit card usage with the frequency of usage of credit cards by the respondents Inference The above table shows the following major credit card usage patterns cited by 76% of male respondents including Shopping, dining, Entertainment. The above table shows the following major credit card usage patterns cited by 24% of female respondents including Shopping, Utility bills.

120%

100%

80%

60% Female Male 40% Total

20%

0%

Showing frequency of usage of credit cards and the reasons for preferring credit cards over other personal finance options by the respondents
Factors Low interest rates Exclusive rewards using purchase points and loyalty programs Cash-back schemes Roadside assistance access during emergencies Special discounts at selected global and/or local retail and fine dining outlets and/or travel privileges. Higher cash withdrawal limits Customer care services putting you first / timely complaint and query resolution and/or maximum convenience Wider range of exchange outlets to pay your credit card bills HDFC 20 ICICI Bank 13 IDBI Bank 3 HSBC Bank 3 Others Bank 11 Total 50

12

21

11

50

11 7

20 17

6 10

5 5

8 11

50 50

10

12

13

50

10

14

50

10

10

14

50

7 83

10 109

8 59

8 50

17 99

50 400

Showing frequency of usage of credit cards and the reasons for preferring credit cards over other personal finance options by the respondents
25 20

15

HDFC ICICI IDBI

10

HSBC Others

0
Low interest rates Exclusive rewards using purchase points and loyalty programs Cash-back schemes Roadside assistance access during emergencies Special discounts at selected global and/or local retail and fine dining outlets and/or travel privileges Higher cash withdrawal limits Customer care Wider range of services putting exchange you first / timely outlets to pay complaint and your credit card query resolution bills and/or maximum convenience

INFERENCE

Low interest rates & cash back schemes are the most motivating factor while selecting a credit card ICICIs credit card is the mostly preferred for the given factors criteria.

Showing frequency of usage of credit cards and the reasons for preferring credit cards over other personal finance options by the respondents.

FREQUENCY OF USAGE OF CREDIT CARDS

Bank's Credit Card HDFC Bank ICICI Bank HSBC Bank IDBI Bank

Any purchase 10% 19% 4% 5%

Only air-ticket booking 5% 9% 4% 2%

Only week-end shopping 4% 3% 4% 1%

Grand Total 19% 31% 12% 8%

Others
Grand Total

14%
52%

7%
27%

9%
21%

30%
100%

Showing frequency of usage of credit cards and the reasons for preferring credit cards over other personal finance options by the respondents

120%

100%

80%

Any purchase

Inference

60%

31% of the respondents who use ICICI Bank credit cards, out of which 19% use their credit card for any purchase 52% of respondents use credit card for any purchase.

Only week-end shopping Only air-ticket

Total

40%

20%

0% HDFC BANK ICICI BANK IDBI BANK HSBC BANK Others Total

Showing payment strategy and the occupation of the respondents

Payment Strategy

Banks HDFC Bank

Fixed payment every month 4%

Full repayment Less than the within 50 days minimum of purchases, payment interest-free required 9% 2%

Minimum payment required only 4%

Grand Total 19%

ICICI Bank IDBI Bank

HSBC Bank Others Grand Total

8% 1%
1% 4% 18%

10% 4%
8% 19% 50%

4% 0%
0% 2% 8%

9% 3%
3% 5% 24%

31% 8%
12% 30% 100%

Showing payment strategy and the occupation of the respondents

120%

100%

80%

Less than the minimum payment required Minimum payment required only

60%

Full repayment within 50 days of purchases, interest free Fixed payment of every month

40%

Total
20%

0% HDFC BANK ICICI BANK IDBI BANK HSBC BANK Others Total

INFERENCE 50% of respondents prefer to make full payment within 50 days.

FINDINGS
1. Self employed (14%) and Service sector (58%) shows that the respondents belong to these two sectors make use of credit cards more widely and were in line with demographic composition of Jaipur city. Most of the respondents have cited hidden financial charges as common problem regarding credit card. Respondents have expressed very little preference for the use of cheques in making payments. Major credit card usage patterns cited by 76% of male respondents use credit cards for Shopping, Dining, Entertainment etc. Most of the respondent who prefer credit card as mode of payment fall under Rs 5000 - 10000 income group. In fact credit card used to be yet another useful source of short term finance for this group of income holder

2. 3. 4. 5.

6. The monthly expenses analyses of the respondents indicate that 82% of them were not spending more than Rs 6000. This shows that though 84% of the respondents were having a monthly income of above Rs 5000, the spending nature was very less and most of them saving or locally remitting to their home country but were not spending in Jaipur city. 7. The fact that 33% of the respondents prefer credit card and 19% of respondents prefer debit card as the preferred mode for making payments shows that plastic money payment was very dominant among the respondents. The cash mode of payment was more among male respondents than the female respondents, which shows that females were more particular not to make cash payments as cash was more risky to handle than the credit/debit card means. 8. 86% of all respondents have cited the major reasons of Convenient access to liquid cash Ease of obtaining loans c Loyalty incentives.

9. 76% of male respondents have cited the following frequency of credit card usage(in order of preference) For any purchase Only air-ticket booking Only weekend shopping 10. Most of the respondents have cited the following adopted approaches for settlement of their credit card bills (in order of preference Full repayment within 50 days of purchases, interest-free Minimum payment required only Fixed payment every month Less than the minimum payment required

LIMITATIONS OF THE STUDY

This study is bound by time constraints and the analyses performed and data collected will be relevant for the concerned time-period only. The secondary data used in this study has been previously researched and has not been recently reestablished with reference to the current scenario, so maximum possible accuracy has been attempted with respect to the secondary data. The primary data has been gathered from a restricted representative sample set of 50 banking customers, owing to time, resources and cost constraints.

CONCLUSION
Credit card purchases must be encouraged Whether its buying gold or electronic goods, booking holidays or air tickets, or even paying a water and electricity bill, consumers are unfairly slapped with a levy for simply opting to place their purchase on plastic. Having to pay extra costs for using plastic undermines the move towards e-services. Times are changing. There is a movement to purchase goods and services online. E-services are efficient, manpower lean and are the way of the future. Having to pay extra costs to use a credit card is a deterrent and undermines this move towards effective and efficient e-services. Merchants will need to simply build the methods of payment into the cost of doing business. In these times of challenging economic conditions, the consumer should not be penalised for using a credit card to make purchases. The factors determining the selection of credit card indicates that Low interest rates and cash back schemes would trigger the respondents motivation to select a card. Also the hidden charges and poor customer services are most common problems faces by the respondents. Therefore banks should take steps to improve its post sales customer services, reveal all the charges in detailed schedule

Bibliography
www.hdfcbank.com www.icicibank.com www.idbibank.com www.hsbcbank.com www.info2finance.com www.commercialreport.com www.wikipedia.com

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