When store credit cards hurt retailers: The differential effect of paying credit card dues on consumers' purchasing behavior

2020 ◽  
Vol 107 ◽  
pp. 290-301 ◽  
Author(s):  
Samer Sarofim ◽  
Promothesh Chatterjee ◽  
Randall Rose
Keyword(s):  
Differential Effect ◽  
Credit Card ◽  
Credit Cards ◽  
Purchasing Behavior ◽  
Store Credit

scholarly journals Customer Preference For Alternative Credit Card Based Payment Methods: Some Empirical Evidence

2011 ◽  
Vol 3 (3) ◽  
pp. 137
Author(s):  
Gopala K. Ganesh ◽  
Erramilli M. Krishna
Keyword(s):  
Empirical Evidence ◽  
Credit Card ◽  
Consumer Preferences ◽  
Credit Cards ◽  
Mail Survey ◽  
Bank Credit ◽  
Background Characteristics ◽  
Customer Preference ◽  
Payment Methods ◽  
Store Credit

This article looks at consumer preferences for two major types of credit cards viz: (1) national credit cards i.e. bank credit cards and travel and entertainment cards that are typically accepted at a wide variety of establishments and (2) store credit cards whose acceptance is typically limited to stores that constitute a department store chain. Through a mail survey, an attempt is made to identify the reasons for card preferences and distinguishing background characteristics of individuals with a distinct preference.

scholarly journals Latent Variable Models for Integrated Analysis of Credit and Point Usage History Data on Rewards Credit Card System

2020 ◽  
Vol 13 (3) ◽  
pp. 106
Author(s):  
Ryotaro Shimizu ◽  
Haruka Yamashita ◽  
Masao Ueda ◽  
Ranna Tanaka ◽  
Tetsuya Tachibana ◽  
...  
Keyword(s):  
Credit Card ◽  
Latent Variable ◽  
Latent Class ◽  
Credit Cards ◽  
Latent Class Models ◽  
Integrated Analysis ◽  
Purchasing Behavior ◽  
History Of ◽  
Card System ◽  
Class Models

Recently, credit cards with point rewards functions (rewards credit cards) are widely used. Credit card companies can collect the users’ usage log data of various stores in multiple industries. The purposes of possessing a credit card varies depending on each user such as to use only the credit function, to use both the credit and point rewards functions, etc. Moreover, credit cards can be used in various situations in users’ lives, and the purchase history of each user is diverse. Focusing on the diversity of both card possessing purposes and purchasing behavior for each user, we propose two latent class models representing these diversities in this research.

scholarly journals IMPLEMENTATION OF BANK INDONESIA REGULATION NO. 18/40/PBI/2016 ON PAYMENT TRANSACTIONS USING CREDIT CARDS AT SHOPPING CENTERS IN BENGKULU CITY

2020 ◽  
Vol 9 (2) ◽  
pp. 172-184
Author(s):  
Muhammad Tedy Dorisman Setiadi ◽  
Nur Sulistyo Budi Ambarini ◽  
Widiya N Rosari
Keyword(s):  
Credit Card ◽  
Credit Cards ◽  
Legal Protection ◽  
Secondary Data ◽  
Main Research ◽  
Credit Card Data ◽  
Approach Method ◽  
Strict Regulation ◽  
Cash Register ◽  
Store Credit

The objective of the research was to study the implementation of Bank Indonesia Regulation No.18/40 / PBI / 2016 onDouble Swipe of Credit Card. The empirical juridical approach method in this researchused primary and secondary data as the main research data, through interviews and literature. A credit card is a credit facility provided by the issuing bank to its customers for transaction. From the research it was found thatin prior to the enactment of Bank Indonesia Regulation No.18/40/PBI/2016 on Payment Transactions Using Credit Cards, there were merchants that still do double swipe on credit card during payment transactions, first in the EDC (Electronic Data Capture) machine and on the cash register machine. However,due to the restriction on double swipe on credit card, this had been reduced. It was also strengthened by a strict regulation in the form of sanctions, reprimands and threats of crime committed by Bank Indonesia to merchants who conduct double swipe on credit card. The mechanism of bank issuing the credit card in giving approval is always different, but the terms and procedures are relatively the same. Legal protection of credit card users occurs when the signing of credit card approval agreement between the issuing bank and users since there is not clear juridical regulation. The problem mostlyarisingregarding the credit cards usage was credit card data scam. The only way to prevent this was through the use of credit cards properly, securely store credit cards when making payment transactions using credit cards, and understand the procedure of using a credit cardinpayment transactions properly. In case of credit card violation, the holder must report to the bank issuing the credit card and Bank Indonesia.

Consumers‟ Acceptance of „Halal‟ Credit Card Services: An Empirical Analysis

2015 ◽  
Vol 3 (1) ◽  
pp. 51 ◽  
Author(s):  
Zaimy Johana Johan ◽  
Lennora Putit
Keyword(s):  
Perceived Control ◽  
Credit Card ◽  
Credit Cards ◽  
Product Knowledge ◽  
Key Factors ◽  
Developing Nation ◽  
Business Transactions ◽  
Factors Influencing ◽  
Financial Credit ◽  
Survey Questionnaires

Many past researches have been carried out in an attempt to continuously understand individuals‟ consumption behaviour. This study was conducted to investigate key factors influencing consumers‟ potential acceptance of halal (or permissible) financial credit card services. Specifically, it anticipated the influence of attitude, social influences and perceived control on consumers‟ behavioural intention to accept such services. In addition, factors such as religiosity and product knowledge were also postulated to affect consumers‟ attitude towards the act of using halal credit cards for any retail or business transactions. Using non-probability sampling approach, a total of 500 survey questionnaires was distributed to targeted respondents in a developing nation but only 220 usable feedbacks were received for subsequent data analysis. Regression results revealed that religiosity and product knowledge significantly influence consumers‟ attitude toward using halal credit card services.  Attitude in turn, subsequently has a significant impact on consumers‟ intention to accept halal financial credit card services. Several theoretical and managerial contributions were observed in this study.   

scholarly journals Neural mechanisms of credit card spending

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Sachin Banker ◽  
Derek Dunfield ◽  
Alex Huang ◽  
Drazen Prelec
Keyword(s):  
Credit Card ◽  
Credit Cards ◽  
Purchase Behavior ◽  
Facilitation Effect ◽  
Product Price ◽  
Personal Credit ◽  
Psychological Mechanisms ◽  
Network Activation ◽  
Payment Instruments ◽  
Reward Network

AbstractCredit cards have often been blamed for consumer overspending and for the growth in household debt. Indeed, laboratory studies of purchase behavior have shown that credit cards can facilitate spending in ways that are difficult to justify on purely financial grounds. However, the psychological mechanisms behind this spending facilitation effect remain conjectural. A leading hypothesis is that credit cards reduce the pain of payment and so ‘release the brakes’ that hold expenditures in check. Alternatively, credit cards could provide a ‘step on the gas,’ increasing motivation to spend. Here we present the first evidence of differences in brain activation in the presence of real credit and cash purchase opportunities. In an fMRI shopping task, participants purchased items tailored to their interests, either by using a personal credit card or their own cash. Credit card purchases were associated with strong activation in the striatum, which coincided with onset of the credit card cue and was not related to product price. In contrast, reward network activation weakly predicted cash purchases, and only among relatively cheaper items. The presence of reward network activation differences highlights the potential neural impact of novel payment instruments in stimulating spending—these fundamental reward mechanisms could be exploited by new payment methods as we transition to a purely cashless society.

scholarly journals Does the visual salience of credit card features affect choice?

2021 ◽  
pp. 1-18
Author(s):  
Matthew D. Hilchey ◽  
Matthew Osborne ◽  
Dilip Soman
Keyword(s):  
Interest Rates ◽  
Random Sample ◽  
Credit Card ◽  
Credit Cards ◽  
Salient Feature ◽  
The Other ◽  
Visual Salience ◽  
Product Features ◽  
Hypothetical Scenario

Abstract Regulators require lenders to display a subset of credit card features in summary tables before customers finalize a credit card choice. Some jurisdictions require some features to be displayed more prominently than others to help ensure that consumers are made aware of them. This approach could lead to untoward effects on choice, such that relevant but nonprominent product features do not factor in as significantly. To test this possibility, we instructed a random sample of 1615 adults to choose between two hypothetical credit cards whose features were shown side by side in tables. The sample was instructed to select the card that would result in the lowest financial charges, given a hypothetical scenario. Critically, we randomly varied whether the annual interest rates and fees were made visually salient by making one, both, or neither brighter than other features. The findings show that even among credit-savvy individuals, choice tends strongly toward the product that outperforms the other on a salient feature. As a result, we encourage regulators to consider not only whether a key feature should be made more salient, but also the guidelines regarding when a key feature should be displayed prominently during credit card acquisition.

Money growth variability and output: evidence with credit card-augmented Divisia monetary aggregates

2020 ◽  
Vol 24 (5) ◽  
Author(s):  
Jinan Liu ◽  
Apostolos Serletis
Keyword(s):  
Financial Stability ◽  
Credit Card ◽  
Negative Impact ◽  
Balance Sheet ◽  
Credit Cards ◽  
Money Growth ◽  
Monetary Policies ◽  
Growth Variability ◽  
Significant Negative Impact ◽  
Growth Volatility

Abstract We reexamine the effects of the variability of money growth on output, raised by Mascaro and Meltzer (1983), in the era of the increasing use of alternative payments, such as credit cards. Using a bivariate VARMA, GARCH-in-Mean, asymmetric BEKK model, we find that the volatility of the credit card-augmented Divisia M4 monetary aggregate has a statistically significant negative impact on output from 2006:7 to 2019:3. However, there is no effect of the traditional Divisia M4 growth volatility on real economic activity. We conclude that the balance sheet targeting monetary policies after the financial crisis in 2007–2009 should pay more attention on the broad credit card-augmented Divisia M4 aggregate to address economic and financial stability.

scholarly journals Credit card cue effect

2019 ◽  
Vol 38 (2) ◽  
pp. 368-383
Author(s):  
King Yin Wong ◽  
Michael Lynn
Keyword(s):  
Credit Card ◽  
Design Methodology ◽  
Credit Cards ◽  
Well Being ◽  
Financial Security ◽  
Consumer Spending ◽  
Content Type ◽  
Moderation Effect ◽  
Show Evidence

Purpose The extant literature has mixed results regarding the credit card cue effect. Some showed that credit card cues stimulate spending, whereas others were unable to replicate the findings or found that cues discourage consumer spending. The purpose of this paper is to investigate how consumers’ sensitivity to the pain of payment affects their mental associations about credit cards and how the differences in credit card associations moderate the credit card cue effect on spending, providing a possible explanation for the mixed results in the literature. Furthermore, this paper examines the role of consumers’ perceived financial well-being, measured by their perceptions of current and future wealth and their sense of financial security, in mediating this moderation effect. Design/methodology/approach An experimental study was conducted with a sample of 337 participants to test the hypothesized model. Findings After being shown credit card cues, spendthrift participants had more spending-related thoughts and less debt-related thoughts, perceived themselves as having better financial well-being and consequently spent more than tightwad participants. Originality/value To the authors’ knowledge, this is the first study to investigate the direct link between an exposure to credit card cues and perceived financial well-being, and one of the few to show evidence of the moderating effect of consumers’ sensitivity to the pain of payment on spending when credit card cues are present. This study suggests that marketers may use credit card cues to promote consumer spending, whereas consumers, especially spendthrifts, should be aware of how credit card cues may inflate their perceived financial well-being and stimulate them to spend more.

Does knowing overcome wanting? The impact of consumer knowledge and materialism upon credit card selection with young consumers

2015 ◽  
Vol 16 (1) ◽  
pp. 50-70 ◽  
Author(s):  
Jakob Cakarnis ◽  
Steve Peter D'Alessandro
Keyword(s):  
Comparative Study ◽  
Survey Research ◽  
Credit Card ◽  
Design Methodology ◽  
Credit Cards ◽  
Consumer Knowledge ◽  
Content Type ◽  
Young Professionals ◽  
The Impact ◽  
Selection Of

Purpose – This paper investigates the determinants of credit card use and misuse by student and young professionals. Critical to the research is the impact of materialism and knowledge on selection of the appropriate credit card. Design/methodology/approach – This study uses survey research and partial least squares to investigate credit card behaviors of students versus young professionals. Findings – In a comparative study of young professionals and students, it was found that consumer knowledge, as expected, leads to better consumer selection of credit cards. Materialism was also found to increase the motivation for more optimal consumer outcomes. For more experienced consumers, such as young professionals, it was found that despite them being more knowledgeable, they were more likely to select a credit card based on impulse. Originality/value – This paper examines how materialism may in fact encourage some consumers to make better decisions because they are more motivated to develop better knowledge. It also shows how better credit card selection may inhibit impulse purchasing.

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