CHAPTER – VI

FINDINGS AND SUGGESTIONS

The findings form the culmination of all research, as based on the information
assimilated from various sources we can arrive at a conclusion. The views of the
respondents of the survey after being analysed have paved the way for achieving
the objectives which had envisaged for this research.

6.1 Findings

For better understanding, findings have been grouped into various categories and
have been listed.

6.1.1 Demographic

• In the sample under the study of the 330 respondents, 67.58% (223) were
males and 32.42% (107) were women.

• The modal age of the respondents is 34.6 year an indication that average
credit card user is a middle aged person who is well aware of his
responsibilities in life.

• 69.1% (228) of the respondents were married, while others were single:
either unmarried or divorced or widowed,

• The concept of the nuclear family was evident as 71.2% (235) of the credit
card holders had a small family comprising of a family of 4 (up to 3
dependents) an indication of the small family norm prevalent in the urban
cities of India. 17.9% of the respondents had 4 to 6 dependents and
indication that the family comprised of a family of four along with parents.
0.6% (35) of the respondents had no dependents indicates that they are the
educated youth who have secured jobs and are living life on their own
terms.

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 • Nearly all (95.4%) of the respondents are educated; 42.3% are graduates,
37.6% are post graduates, 15.5% have professional qualifications. Merely
4.5% are those who have studied up to the school level. This is a clear
indication that those who are educated understand the pros and cons of
using the credit cards and avail its benefits.

• The credit card holders are mainly people who are employed (86.7) with
31.2% in the private sector, 27% in the public sector, 18.5% are
entrepreneurs having their own businesses and 10% are professionals. A
fact to be noted here is that 8.5% are students who have add – on cards
provided by their parents in addition or in lieu of their pocket money.

• Nearly 59.7% of the respondents fall in the middle income group earning
between fifteen to sixty thousand rupees a month. It is this group which
uses the credit card to defer their payments and pay as soon as they get their
next pay cheques. 10% of the respondents use credit card although they
have no income whatsoever, payments are made either by their parents or
spouses.

6.1.2 Plastic money and Credit cards

• The use of plastic money is on the rise with 64.8% of the respondents using
both credit and debit cards, 24.5% use only credit cards and 3.6% use
credit, debit and smart cards.
• 61.8% of the respondents have only one credit card as basically Indians are
pragmatic and do not believe in ostentations. However, a good 14.2% of
the respondents have 3 or more credit cards.

• Among the issuers ICICI leads the pack (17.7%), followed by SBI (17%),
HDFC (14.7%), Citibank (10.5%) amongst others.

• The most popular (31.6%) credit cards are the Gold cards (high end),
followed (23.5%) by the Platinum (premium) credit cards. Linked credit
cards and specialty cards are yet to catch on with the credit card users
(4.2%).

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 • Among the credit card associations it is the VISA that is most preferred
(63.9%) followed by MasterCard with a preference rate of 27.2%. VISA
electron, Plus and Cirrus credit cards have yet to make an impact upon the
credit card users.

6.1.3 Services offered by the Issuer (Bank)

• The first step is procuring the credit card. 77.6% of the respondents were
approached by their bankers whereas 14.2% of the respondents approached
the banks for getting the cards. 1.8% of the respondents who had more than
one card reported that for the first credit card they approached the banks but
the subsequent ones were offered by the banks themselves.

• 86.4% of the credit cardholders faced no difficulty in getting their cards,

6.4% had some difficulty while others had mixed experiences.

• 75.8% of the credit card users received their statements well before the
payment dates whereas the remaining 17.8% received it a few days in
advance. None of them complained of not receiving the statements.

• 66.1% of them received their replacement cards well before the expiry of
their credit cards, while 27.5% stated that they got their replacements cards
within a few days of the old one expiring.

• 63.9% of the credit cardholders mentioned that they were not charged any
annual fees, 25.4% paid anywhere between ` 501 to 1,000 p.a. while only
0.6% of the respondents paid more than a thousand rupees per annum.

6.1.4 Credit card Users attitudes and habits

• 80.6% of the respondents make the payments themselves and for the others
(13%) payments are made by their guardians or spouses on their behalf.

• 63.9% of the credit card users’ under the survey prefer to make payments
by cheques as it is convenient to deposit cheques at strategic placed drop
boxes at railway stations, malls, housing societies etc. 13.3% pay through

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 e-banking, while 9.1% have the payments directly debited to their bank
accounts. Others use a combination of payment options.
• 74.5% of the respondents always make payments by the due dates. 17.9%
sometimes pay by the due date but it is the 1.2% of the respondents who
pay late and generate income for the banks.

• 48.5% of the respondents use the credit cards both offline as well as online
for them the use of credit cards have become a habit and is a substitute for
cash and cheque. 38.8% of them use it only offline and free themselves of
refilling their purses and wallets every time they step out of their homes.
6.45 of the respondents carry out transactions on the internet (online) using
their credit cards.

• Physical use of credit cards are preferred for making purchases of daily use
at malls and supermarkets, at restaurants, for fuel at petrol pump, payments
of utility bills etc. On the other hand credit cards are used for transactions
on the internet for payment of utility bills, airlines and railway reservations,
purchasing products online etc.

• Credit cards are popular mainly because of its convenience. Payments can
be deferred; unplanned purchases can be made apart from getting bonus
points and cash discounts.

6.1.4 Frauds

65 of the respondents informed that their credit cards had been stolen misplaced or
lost. 58 of these respondents could block their credit cards by contacting the
‘Helplines’. Nine of the respondents suffered monetary losses (listed in Appendix
F) and Nitin Presswala and Jayesh Desai stating that they were victims of fraud as
their cards were smimmed while shopping at ‘Inorbit’, a popular Mall in Malad
(W).

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6.2 Results of the Hypotheses.

The hypotheses were tested by conducting Z test, Chi-Square and ANOVA and the
results are summarized as follows:

Hypothesis Tool used Value Result

H0: Proportion of credit card users are not

misled by promotional campaigns / Z test -10.2943 Accepted
advertisements.

H0 : Proportion of credit card users do not

face problems getting points redeemed / Z test -11.92894 Accepted
money back.

H0 Proportion of credit card users to

whom service charges have not been Z test -15.80433 Accepted
levied without prior information.

H0 : Proportion of credit card users are

Z test -5.691983 Accepted
not victims of faulty billing.

H0: Proportion of credit card statements

Z test - 8.624243 Accepted
are received on time.

H0: Proportion of new credit cards are

Z test -14.496 Accepted
issued before the expiry of the old one.

H0: ‘Knowledge of terms and conditions

Chi –
offered by the bank’ and ‘Gender’ are 10.279 Rejected
Square
independent of each other.

H0: ‘Knowledge of interest rates charged

Chi – 9.768 Rejected
by the bank’ and ‘Gender’ are

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 independent of each other. Square

H0: ‘Knowledge about other charges

Chi –
levied by the bank’ and ‘Gender’ are 7.815 Rejected
Square
independent of each other.

H0:There is no significant difference Accepted

One way
among the average level of marital status 0.114743
ANOVA
of credit card user.

(All the tests are accepted or rejected at 5% level of significance)

6.3 Conclusion

Plastic money has today become the most common form of transactions in the
urban areas all over the world. In a few decades it will rule all transactions due to
increasing costs of printing currency notes and minting of coins. An attempt has
been made to map the history of credit cards, features, types, workings, frauds and
precautions to be taken while using the credit card giving valuable insight to
readers as well as to the credit card users.

Consolidating the results of the tests we can summarise that the needs and
expectations of the credit card users are satisfied with the services provided by the
issuers. the credit card holders are happy as they get proper bills on time, credit
cards are renewed and sent even before the old ones expire, points are redeemed
they are not misled by false promises and new charges or charges are revised only
after proper intimation is given. Some women respondents were please with the
points that would accumulate and the products they got in exchange from the
issuers. Whereas men on the other hand preferred money back to adjust the same
against charges or annual fees provided such a scheme was available. Moreover the
‘Helplines’ are reachable day and night, lost or stolen credit cards get blocked and
problems get resolved by approaching these ‘Helplines’.

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India being a patriarchal society it reflects upon the people who use the credit
cards. As compared to women the men have greater awareness about the terms and
conditions, interest rates and details about other charges levied by the issuers.
However the usage of credit card does not depend upon the marital status of the
credit card user, as married as well as singletons show the same preference towards
credit cards.

The correlation results establish the fact that the frequency of usage of credit cards
and the number of credit cards possessed by an individual go hand in hand.
Mathew L. and Slocum J. had established in 1969 - 1970 that there is a correlation
between the spending habits and the different social classes. Even after 40 – 42
years some things have continued to remain the same as even today people who
have more money and belong to the higher economic class have multiple credit
cards and use their credit cards more frequently than those from the middle or
lower economic classes.

The credit cards are popular because of the conveniences it offers rather than for its
snob value. Initially when they were introduced it was a matter of pride to own a
credit card. But today even the average man on the streets is using the credit card
to make purchases of daily use, to make reservations on trains and planes, swiping
it at restaurants and for petrol for his vehicle. In fact one of the respondents Nitin
Presswala stated that “in spite of a monetary loss I continue to use the credit card
for the convenience it offers although now I am a little careful”.

Looking at the overall situation and from the opinion from the respondents we can
say that the experiences of the credit card – users under the survey – has been good
and they are happy using the credit cards. If we convert the five scale rating to
three scale rating we find that 72.1% of the respondents have rated their overall
experience as ‘very good’ and ‘good’. Whereas only 1.5% of the respondents have
rated their experiences as poor and very poor with 20.9% having no complains
using their credit cards and have rated their experience as satisfactory. The
following can be clearly seen in the following graph.

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 Figure No. 6.1

Credit Card Users' Experience

(Over all)
45.0% 40.0%
40.0% 32.1%
35.0%
30.0% 20.9%
25.0%
20.0%
15.0% 5.5%
10.0% 0.6% 0.9%
5.0%
0.0%

With advances in technology all monetary transactions will be carried out through
cards and wire in the future. The minor problems associated with cards too will
disappear as the world will move towards a cashless society.

6.4 Suggestion

Those 5 respondents (1.5%) who have rated their experiences as ‘poor’ and ‘very
poor’ have suffered monetary losses and they feel that their requests and
complaints were not given the importance that was necessary. To protect oneself
from monetary losses and inconveniences due to credit cards getting misplaced lost
or picked it is advisable to opt for the credit card protection policy which is
available at a nominal value with the issuers. A credit card user must register for
the SMS services so that information is relayed every time the credit card is used
and frauds (if any) can be detected early. The credit card user can always take
recourse under Section 27 of the Consumer Protection Act 1986, if threatened by
recovery agents using coercive and intimidatory tactics for recovery of outstanding
amounts under dispute

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6.5 Recommendations for further research

From the data available it has been observed that the number of debit cards in
circulation is more as compared to the number of credit cards although in terms of
monetary transactions the credit cards fare better than the debit cards. It could be a
topic for study to compare and investigate the reason for this phenomenon.

Another area on which work could to be done is to explore the attitudes and the
preferences of those who use ‘add-on cards’ especially college going students and
homemakers. This would help the credit card issuers in expanding their base by
catering to the needs of this segment of credit card users.

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