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CREDIT CARD'S POSSESSION AND USAGE AMONG
STAFF IN UNIVERSITI UTARA MALAYSIA
(CODE S/O 11576)
SHAFIE MOHAMED ZABRI
FIKRIYAH ABDULLAH
JUHAIDA ABU BAKAR
UNIVERSITI UTARA MALAYSIA
2006
i
DISCLAIMER
We are responsible for the accuracy of all opinion, technical comment, factual report, data,
figures, illustration and photographs in the article. We bear full responsibility for the
checking whether the material submitted is subject to copyright or ownership right. UUM
does not accept any liability for the accuracy of such comment, report and other technical
and factual information and the copyright rights claim.
Head:
-------------------------------------------
SHAFIE BIN MOHAMED ZABRI
Researcher:
-------------------------------------------
FIKRIYAH BT ABDULLAH
Researcher:
-------------------------------------------
JUHAIDA BT ABU BAKAR
ii
ACKNOWLEDGEMENT
First and foremost, we would like to extend our sincere gratitude to the Jabatan
Penyelidikan dan Inovasi, Universiti Utara Malaysia and Faculty of Finance and Banking
for giving us an opportunity to make a research under Faculty Grant. Last but most, we
wish to express our sincere appreciation to our colleagues for their encouragement, and
also to our parents and family for their unconditional support, love and patient.
iii
ABSTRACT
The smooth and efficient operation of the payment system is a critical factor in a country’s
economic growth process. Payment methods consist of cash, cheques, debit cards, credit
cards, charge cards, electronic purse and credit transfer. This study focus on a credit card as
the use of credit cards as a medium of exchange for commercial, business and social
purchases is ubiquitous. Credit card market in Malaysia also shows an increasing trend in
term of its volume of usage and number of card possessed. Credit card is a card whose
holder has been granted a revolving credit line. In this study, our respondents come from
staffs in Universiti Utara Malaysia. A survey method has been adopted in finding
information on the respondents via questionnaires. A three-section questionnaire was
developed to find the demographic and socioeconomic characteristics of the respondents,
the possession of credit card and the usage of credit card among them. All the information
from 117 respondents then analyzed using the descriptive method to reflect respondent’s
demographic and socioeconomic data together with their possession and usage of credit
card.
iv
TABLE OF CONTENTS
Page
Disclaimer i
Acknowledgement ii
Abstract iii
Table of Contents iv
List of Tables vi
CHAPTER ONE: INTRODUCTION
1.1 Credit Card Revolution 3
1.2 The Malaysian Credit Card Market 9
1.3 Background: Universiti Utara Malaysia 15
1.4 Research Objective 15
1.5 Significance of the Study 18
CHAPTER TWO: LITERATURE REVIEW
2.1 Demographic and Socioeconomic Characteristics 20
2.2 Possession and Usage of Credit Card 27
CHAPTER THREE: METHODOLOGY, DATA AND VARIABLES
3.1 The Nature of Study 33
3.2 Sampling Method
3.2.1 Sample Size 34
3.3 Data Collection Technique
3.3.1 Primary Source 35
3.3.2 Secondary Source 36
3.4 Development of Questionnaire
v
3.4.1 Layout 37
3.5 Data Analysis 39
CHAPTER FOUR: FINDINGS AND ANALYSIS
4.1 The Demographic and Socioeconomic Characteristics 40
4.2 Possession of Credit Card 47
4.3 Usage of Credit Card 54
CHAPTER FIVE: CONCLUSION
5.0 Conclusion 63
REFERENCES 65
APPENDIX
vi
LIST OF TABLES
Table Title Page
1 Malaysia Banking System: Credit Card Statistics 12
4.1.1 Respondent Profiles by Gender 41
4.1.2 Respondent Profiles by Race 41
4.1.3 Respondent Profiles by Age 42
4.1.4 Respondent Profiles by Marital Status 43
4.1.5 Respondent Profiles by Number of Dependency 44
4.1.6 Respondent Profiles by Years Working in UUM 44
4.1.7 Respondent Profiles by Monthly Income 45
4.1.8 Respondent Profiles by Job Category 46
4.1.9 Respondent Profiles by Level of Education 47
4.2.1 Number of Respondents that Possessed Credit Cards 48
4.2.2 Number of Credit Cards Owned by Respondents 48
4.2.3 Number of Credit Cards Used Regularly 49
4.2.4 Types of Credit Cards Owned 50
4.2.5 Preference of Credit Cards 50
4.2.6 Selection Criteria of a Credit Card 51
4.2.7 Purpose of Possessing Credit Card 52
4.2.8 Sources of Information on Credit Card 53
4.2.9 Preference of Co-branded Credit Card 54
4.2.10 Consideration Factors of Co-branded Credit Card 54
4.3.1 Frequency of Monthly Credit Card’s Usage 55
4.3.2 Types of Credit Card’s Usage 56
4.3.3 Type of Online Purchase by Credit Card 57
4.3.4 Concern over Interest Charged on Credit Card 58
4.3.5 Factors Motivating Credit Card’s Usage 58
4.3.6 Plan on Credit Card’s Usage 59
4.3.7 Credit Card’s Monthly Spending Amount 60
4.3.8 Credit Limit Offered to Respondents 60
1
CHAPTER 1
INTRODUCTION
Credit is a method of selling goods or services without the buyer having cash in hand.
A credit card is an automatic of offering credit to a consumer. Today, every credit card
carries an identifying number that speeds shopping transactions. The use of credit cards
as a medium of exchange for commercial, business and social purchases is ubiquitous.
Their appeal is widespread and they naturally compete with various payment systems
including cash, personal cheques, debit cards, electronic purse and credit transfers. In
developed countries such as the United States and Europe, credit card and plastic
money are viewed as an indication of cashless society. Cashless society allows high-
tech infrastructure to be carried out in developed country through the usage of plastic
money (Ingene and Levy, 1982).
Nowadays, credit card has become one of fast developed-products offered by banking
institutions in Malaysia. Currently, there are 18 credit card issuers in Malaysia such as
Citibank Berhad, HSBC (M) Berhad, Standard Chartered Bank Berhad, Malayan
Banking Berhad, Public Bank, and Bank Islam Malaysia Berhad. Customers can choose
wider range of either conventional or Syariah-based credit cards. Despite the increasing
trend, the use of cash and cheques continue to remain high in Malaysia (Bank Negara
Malaysia, 2003).
2
Moreover, research done by Datamonitor1, revealed that the Asia-Pacific credit card
market covers a relatively small proportion of its large population. Most of the
transactions are done in cash, and great deals of retailers, excluding those in large cities,
do not accept cards as payment. However, transaction habits are slowly changing as the
knowledge about cards becomes more widespread. The current leading credit card
companies in the Asia-Pacific include Citigroup, HSBC and Standard Chartered. In
Malaysia alone, HSBC Bank Malaysia as at April 2006 has about 950,000 cards in
circulation. Standard Chartered, one of the top three credit card issuers in Malaysia, has
448,000 cardholders. In response to the competitiveness of global market environment,
credit card institutions shifted their target on non-traditional consumers, such as lower
income populations and college students (Braunsberger et al., 1997).
Credit cards serve two distinct functions for consumers: a mean of payment and a
source of credit (Ausubel, 1991; Chakravorti, 1997 & 2000; Chakravorti and Emmons,
2001; Slocum and Matthews, 1970; Stavins, 2000). Based on their main use of credit
cards and the benefits sought, credit cards users can be segmented into two groups:
convenience users and revolvers (Lee and Hogarth, 1999). Convenience users tend to
employ credit cards as an easy mode of payment and to typically pay their balance in
full upon receiving the account statement. Revolvers, on the other hand, use the card
principally as a mode of financing and elect to pay interest charges on the unpaid
balance (Lee and Kwon, 2002).
1 Business Information Company Specializing in Industry Analysis.
3
Credit card is a card whose holder is granted a revolving credit line. It is also referred
as a card issued by a financial institution that allows the cardholder to use credit to
purchase goods and services up to a predetermined limit. It enables the holder to make
purchases and or cash advances up to a pre-arranged limit. The credit granted can be
settled in full by the end of a specified period or in part, with the balance taken as
extended credit. Interest may be charged on the transaction amounts from the date of
each transaction or only on the extended credit where the credit granted has not been
settled in full. Interest rates are traditionally higher than those charged on consumer
loans.
Credit cards have been another major area that banks have focused on in recent years in
line with the larger goal of promoting retail or consumer banking. The industry has seen
phenomenal growth in the number of cards in circulation as well as the amount spent
via credit card transactions. Despite the recent developments in and impediments to
credit cards usage in developed countries, one still observes the spread of credit card
ownership and usage in advanced developing countries of Asia, Africa, the Middle East
and Latin America (Kaynak et al., 1995).
1.1 Credit Card Revolution
The first credit cards were issued in the United States by Western Union in
1914. This was followed by Diners Club, which introduced a travel and
entertainment credit card in 1950 and subsequently, in 1958, Bank of America
4
issued its Bank Americard and American Express, its American Express Card.
During the 1960s and 1970s Visa and Master Card have also expanded their
operations on a global scale (Kaynak et al., 1995). In order to avoid
competition, Master Card systems and Visa established themselves as the
bank’s credit card industry in the United States (Garcia, 1980).
Credit cards were not always made of plastic. There have been credit tokens
made from metal coins, metal plate, celluloid, metal, fiber, paper and now
mostly plastic cards. Since 1960, usage of bank credit cards in the United States
had undergone phenomenal growth. Credit cards had replaced cash and cheque
in many kinds of transactions. In the retail industry, the use of “non-store” credit
cards, such as Visa, Mastercard and American Express, had also grown rapidly.
In 1978, non-store cards were used in almost three percent of all transactions in
the United State’s departmental stores with over $1 million in sales. By the end
of 1980, non-store cards had increased to eight per cent of the transactions. On
the other hand, in specialty stores with over $ 1 million sales, credit cards
accounted for ten per cent of the dollar sales volume in 1978. In 1980, credit
cards sales had increased dramatically to seventeen per cent of the dollar sales
volume (Worthington, 1990).
5
Diners Club
In 1950, a New York businessman, Frank McNamara, put forward the idea of a
plastic card, which could be used to pay for meals in all major restaurants in the
city. The inspiration for this came when he was unable to pay for a meal in New
York restaurant as he had no cash and his dining companions only had a cheque
books based on out of state banks, which the restaurant refused to accept. The
plastic card concept was that in return guaranteeing the payment, the company
organizing the scheme would receive 5 percent to 10 percent of the cost of
every meal charged to the account and that the cardholders would pay off the
outstanding balance in full at the end of every month. After some initial
difficulties in selling the concept to the restaurateurs (nine of the first ten
restaurants approached turned down the idea), eventually 27 establishments
agreed to accept what was then branded as the “Diners Club” card.
The first year of operation saw 200 members, the second year 42,000 and with
$5 annual membership fee, by the time that Diners Club became a public
company in 1955, it had some 200,000 members, $20 million in charges and
$500,000 in profits. Travel related activities such as hotels and airline were
quickly recruited as acceptance outlets, alongside restaurants and so the concept
of the T&E (travel and entertainment) card was created. The formula of the
annual fee, the merchant service charge, full payment at the end of the account
period and no pre-set upper spending limit, defines the T&E card to this day.
The principle customer was the business-person who needed records of charged
6
made for reimbursable purposes and who expected to receive repayment for
accrued expenses within a 20 to 40 day period. The success of the Diners Club
attracted competitors to the T&E market, none of whom were particularly
successful, with the exception of American Express.
American Express
American Express has long pedigree of serving the US traveler and had offices
and agents in cities around the world, alongside a well developed business of
travelers’ cheques. To this existing portfolio of products was added in 1958, a
T&E card. This card, coloured green, has become the icon most associated with
American Express and, by 1987; over 10 million such cards were in issue. To
segment its market further, American Express introduced the Gold Card (1966)
and the Platinum Card (1984) and a revolving credit card, branded Optima, in
the spring of 1987. The Optima Card was seen as a direct response to the
success of the bank owned credit cards, which had become attractive to
consumers because of the revolving credit facility that they offered, as opposed
to the T&E charge cards, which required full settlement of the amount owed, at
the end of each account period.
Bank Americard
The first bank sponsored credit plan was introduced by Flatbush National Bank
of Brooklyn, New York, in 1946, under the brand of Charge-it. It was a paper-
based system, where local merchants accepted scrip from customers in lieu of
7
cash, deposited the scrip in their accounts with the bank and the customers were
billed for the total scrip outstanding at the end of the month. The first bank card
was introduced by the Franklin National Bank of New York in 1951, but until
1958 and the introduction of an associated revolving credit line, bank cards
merely replicated T&E cards, but without the annual membership fee. One of
the banks that issued cards was the Bank of America, based in California,
which, in 1958, launched Bank Americard, a revolving credit card which by
1961 had grown to one million cards. In 1966, Bank of America introduced a
nationwide clearing system for bank credit card sales slips and this development
rapidly changed the nature of the bank credit card industry.
Previously, bankcards were local or regional in nature and were founded and
run by individual banks. This limited the usefulness of each card, due to the
restricted geographical reach of each particular card and also had the
disadvantage of high start-up costs, because of the challenge of persuading
merchants to accept a bank’s card, while knowing that the penetration of that
card was limited to the bank’s geographical coverage. The Bank of America’s
clearing system enabled other banks to join forces and thus achieved wider
acceptability of their credit cards.
Bank of America branded this service Bank Americard and licensed it to other
banks across the United States, so that they could use that brand, its design and
participate in the clearinghouse system. By 1970, 3,031 banks had affiliated to
8
the scheme and its success had produced the rival Interbank Card Association
and its Master Charge brand. The design of the card was based on the colours,
blue, white and gold, and blue and gold were the colours adopted by Barclays in
1966, when they took the first overseas license of Bank Americard and launched
Barclaycard in the UK.
Visa
Following Bank Americard’s extension of its licensing programme outside of
the USA, the International Bank Americard Cooperation (IBANCO) was
formed in 1974, to unite the financial institutions around the world who wanted
to use and promote the credit card product. The card was a success, but many of
the banks, with strong brand names in their own territory, did not want to issue a
card associated with the Bank of America. Hence, in 1977, Bank Americard
became the Visa card and IBANCO became Visa International. Visa
International is now an organization of over 22,000 financial institution
members and it creates and operates regulations and by-laws; provides a world-
wide electronic clearing system which authorizes transactions and transmits
clearing and settlement data and offers a global network of cash dispensers.
MasterCard
With the creation of the Bank Americard system and its expansion via licensing
agreements, several other large banks in the United States decided that they
would respond to this initiative by forming, in 1966, the Interbank Card
9
Association, which, in 1980, became MasterCard International. Initially, both
Visa and MasterCard required their member banks to offer only one or other of
the two cards. However, by the late 1970s, the concept of “duality” had been
established in the United States and many financial service providers are now
members of both of the international cards associations and hence issue both
MasterCard and Visa cards.
In 1970, the Interbank Card Association acquired the rights to the Master
Charge name and the design of red and yellow interlocking circles have
remained as the logo of the subsequently renamed MasterCard brand. By 1983,
the change from MasterCharge to MasterCard was completed and the two rival
international bank card associations were established as member-owned mutuals
where, under the concept of duality, ironically, card issuers could be and often
were, members of both associations.
1.2 The Malaysian Credit Card Market
The Malaysian card market has recently expanded dramatically in credit card
usage. The credit cards circulation in Malaysia could be grouped into two
categories, which are conventional and Islamic-based credit cards. The players
constitute of domestic and foreign banks and conventional credit cards have
monopolized the market since 1980s. However the market is diversified in 1992
10
with the introduction of Islamic-based credit cards by Ambank Berhad and
followed by Bank Islam Malaysia Berhad.
Credit card has become a practical and natural way of purchasing goods and
services. For instance, it is a common phenomenon to purchase groceries and
gasoline from an automated petrol station even though there was no attendant
where cardholders could charge their credit cards (Ramayah et al, 2002).
There are several top major credit cards namely Visa, Master Card, Diner’s
Club and the recent addition to the Malaysian market, American Express
(Amex) which is issued by local and foreign financial institutions. What does
the credit card represent? Convenience, assurance, revolving credits, lifestyle,
status symbol, Internet shopping, global currency, e-commerce, m-commerce
and the reasons are non-exhaustive. To acquire credit cards in Malaysia, the
applicant has to convince the card issuer that he or she has a stable income and
the ability to meet the payments made with the card. In fact, credit card is not
offered to college or university students as practiced in develop countries.
Although market leaders and followers have already been established, the
situation in the market is still very fragile and a huge potential for further
penetration exists despite the fact that the issuance of new credit card in
Malaysia increases by an average of 12 percent each year. As at 2001, Master
Card captures the largest market share (includes charge card) with 67%. The
11
rest of the cards in Malaysian wallets are Visa with 49% market share, followed
by charge cards like Amex (9%) and Diner (3%). In terms of usage, MasterCard
contributes 53% while Visa shares 34% (Bank Negara Malaysia, 2004)
Malaysia is an ideal market for credit cards in the region due to its large and
growing educated population. A research done by Visa International Ltd,
indicates that out of the 7.5 million Malaysian with bank accounts, a million of
them are eligible for credit cards as compared to other Southeast Asian
countries and Malaysia remains an attractive market for Visa International to
expand their business. Moreover, approximately 5,500,000 Malaysian earn
more than RM1,500 per month and qualify to hold credit cards. Such a vast
market is still untapped. Malaysian customers have a wide variety of card to
choose and yet the market is still low in term of penetration rate, which is only
23% as compared to Singapore (90%), Korea (90%), Japan (85%), Hong Kong
(80%), and Taiwan (70%) though the figure shown an increment year by year
(Bank Negara Malaysia, 2004).
This also clearly signifies more room for growth in the Malaysian credit card
industry, which has yet to be fully tapped by credit card issuers in the country.
This is in line with a survey adopted from The World Competitiveness
Yearbook 2000 that discovered that each American own an average of 1.745
cards, which ranked first in the number of credit cards issued in the world.
12
Malaysia ranked 29th
out of 45 countries surveyed with an average of 0.1029
cards. In other words, out of 10 people only one person owns a credit card.
Although, Malaysia ranked 29th
out of 45 countries in 2000, it seems that the
credit card issuance is tremendously growing. According to Bank Negara
Malaysia, as at June 2005, numbers of cards in circulation are 7.13 million
where 5.8 million were principal holders with the number of cards transaction
amounting to RM14.9 million. Total purchases made by the local cardholders
were RM16, 211.60 million up until June 2005 compared to RM14, 303.90
million for the whole year of 2000. Table 1 shows the increasing growth in the
number of cards in circulation and the approved credit limits.
Table 1: Malaysia Banking System: Credit Card Statistics2
1999 2000 2001 2002 2003 March 2004
Cards in circulation
(million units)3
2.34 2.82 3.43 4.36 5.10 5.31
Credit limits
(RM million) 17,661.60 22,429.90 23,927.10 29,924.10 35,853.00 37,352.10
Total purchases
(RM million)4
9,965.60 14,303.90 17,940.60 22,887.40 26,949.20 7,414.00
Total cash
advances
(RM million) 1,893.20 2,135.0 2,167.50 2,417.30 2,410.60 581.80
Outstanding
balance
(RM million) 5,503.90 7,328.60 8,858.60 10,585.00 12,226.80 12,116.80
Outstanding
balance ≥ 3 months
(RM million) 395.80 369.50 370.90 392.30 532.20 492.80
Default rate (%) 7.19% 5.04% 4.19% 3.71% 4.35% 4.07%
2 Source: Rating Agency Malaysia (RAM), 2004
3 Principal and supplementary
4 Purchases in Malaysia and abroad
13
The increasing number of credit cardholders may be due to the action taken by
Bank Negara Malaysia in reducing the minimum annual income eligibility
criteria from RM24,000 to RM18,000 effective on 28th
July 1999. Considering
the fact that the credit card industry in Malaysia is still in its infancy, the
potential for growth is evident. By 2008, the number of credit cards in
circulation is expected to be 2.6 times over that of 2003. Consistently,
transactional volume and values are expected to grow by about the same
proportion to that of cards in circulation. In order to make sure that the credit
card industry in Malaysia continues flourishing, banking institutions are urged
to accord priority to the Europay Master Card Visa (EMV) chip migration to
effectively address fraud cases involving counterfeiting of cards.
As part of the new guidelines to stimulate credit growth in late 1998 and to
ensure that charges are imposed on credit cardholders were reasonable, credit
card issuers were not allowed to charge cardholders more than 1.5% per month
or 18% per annum in finance charges. Moreover Bank Negara Malaysia also
decided that late payment charges should not be more than 1% of the amount in
default and the banking institutions would only be allowed to charge a
minimum penalty of RM5 (Lee and Toh, 1995). In addition, card-issuing
institutions require at least 5% of the outstanding balance to be paid by the due
date. The remaining balance is allowed to be rolled-over into the following
month for payment they are allowed 20 interest-free days to make payment.
14
At the same time, the general consensus from banks interviewed indicates that
Malaysian credit cardholders were well aware on the standard finance charges
and late payment imposed by credit card issuers. HSBC Bank Malaysia Berhad,
Malayan Banking Berhad, Citibank Berhad and RHB Bank Berhad all claim to
have “manageable” default rates compared to the industry's non-performing
loans rate of over 4%. Malaysia's largest credit card issuer, Citibank Berhad
whereby in every four credit cards issued, one will be a Citibank credit card, has
gone an extra mile by investing heavily in its credit card business, offering both
existing and potential credit card users innovative products, quality customer
service, convenient delivery channels as well as trained and competent sales
personnel.
Meanwhile, Malayan Banking Berhad, the leading local bank said that apart
from better products and services, the convenience aspect also plays an equally
important role when choosing a credit card. They are giving those with
Maybank accounts or credit cards the option to make online payment via
Maybank2u.com. Besides that, for those revolving account holders with other
banks where they pay 1.5% per month, Malayan Banking Berhad will offer
them credit save at 0% for three months if they transfer their remaining balance
to Malayan Banking Berhad
Malayan Banking Berhad believes all these conveniences will help customers
choose their bank as the preferred credit card issuer. As the requirement among
15
potential credit card users is fast changing, banks are intensifying their efforts to
come out with bigger promotions and better products and services to outdo their
rivals.
1.3 Background: Universiti Utara Malaysia
Universiti Utara Malaysia (UUM), one of the Public Institute of Higher
Learnings in Malaysia, was formally incorporated on 16th
February 1984. From
its humble beginnings in Tanah Merah, Jitra in 1990, UUM moved to Sintok, 48
kilometres north of Alor Setar, Kedah. As at June 2006, there are about 20,000
students with 13 faculties offering different types of degree. In order to cater
large number of students’ intake, the management has increased the number of
staff every year. Basically there are two categories of staff in UUM namely
academic and non-academic. An academic staff is referred to professor,
associate professor, senior lecturer, lecturer, tutor and language teacher while
non-academic is referred to management, professional and administrative staff.
Currently, the numbers of staff attached with UUM are 2351, which comprised
of 49% academic staff and 51% non-academic staff.
1.4 Research Objective
Nowadays, credit card customers are becoming savvier, well versed and
educated, as well as demanding, when choosing credit cards to cater for their
16
financial needs. One banker said, “As Malaysia heads towards a cashless
society, credit cards are obviously being transformed into one of the most
fundamental financial service products, especially in urban centres and also,
becoming as basic as a savings account to a customer.”
Aware of the attractiveness, more players continue to enter the domestic credit
card market resulting the growth of the market has slowed down and
competition has intensified in recent years. In view of the intensifying
competition, existing issuers in Malaysia have to fine-tune their marketing
efforts should they wish to maintain their previous growth records. In this
respect, issuers first need to explore new niches and continue converting non-
cardholders into cardholders (Ricky Yee-Kwong Chan, 1997).
In addition, research into the regional market segments of China (Cui and Liu,
2000) suggests that consumers from various regions are significantly different
from one another in terms of purchasing power, attitudes, lifestyles, media used
and consumption patterns. An overview of cardholders attitude can be revealed
either they are “active” or “inactive” similar to the classification of “light
users” or “heavy users” for tangible consumer products (Cook and Mindak,
1984; Kotler and Armstrong, 1996). Hence, credit card users can be categorized
according to their differences in cardholder usage rates. In another research
conducted by Chan (1997) claimed that an “active cardholder” refers to those
17
whose card usage rate was at least ten times per month, whereas “inactive
cardholder” referred to card usage rate of less than ten times per month.
Most importantly, Worthington (2005) has reported in China that in general
cardholders from the private sector use their credit cards far more frequently
than cardholders who work for government organization. Although most banks
in Malaysia, such as Citibank Berhad, HSBC Bank Malaysia Berhad, Standard
Chartered Bank Berhad and some other local financial institutions like Malayan
Banking Berhad and MBF Cards (M) Sdn. Bhd. had significant customer bases,
they were still competing among themselves to attract active cardholders. Thus,
understanding the needs, motivations and priorities of the consumers and
analyzing how they select suppliers and products are the first crucial steps
towards the improvement of consumer satisfaction.
Keeping the importance of marketing research and evaluation of customer’s
needs in mind, this paper aims to achieve the following objectives:
1. To find information on the demographic and socioeconomic characteristics
of credit cardholders in UUM.
2. To study on the possession and usage of credit card among staff in UUM.
18
Besides, the objective of the research also was to provide a greater depth of
understanding about the nuances of credit card ownership and usage in UUM, in
addition to knowledge about the culture of payment among Malaysian.
1.5 Significance of The Study
There are various types of payment systems available in Malaysia including
credit card. Therefore, there is a need to explore the relevant issue on the
behavior of consumers in using this type of payment system. There is a lot of
study can be done especially in exploring consumer’s behaviors towards
ownership of credit card and the way they use it. This research is expected to
contribute to literature on credit card possession and usage in Malaysia.
Information on whom currently holds credit cards, the extent of their use and
how credit card users differ in terms of demographics, socio-economics and
attitudinal orientations provide greater insights into the credit card market in
developing country markets (Kaynak and Harcar, 2001). Reliable and useful
information can be shared and used among academicians and also bankers in
furthering their study especially on consumer behaviors. The findings of this
study will have some implications to the bankers in developing their marketing
strategies in line with the customer preferences. Successful marketing strategies
are based on customer segmentation (Lucas, 1992). Once the market is
segmented, the issuer can run an analysis of the cardholder’s behavior to
determine what will encourage usage.
19
CHAPTER 2
LITERATURE REVIEW
The research literature on credit cards is varied and extensive. Several studies have
focused on a broad array of economic factors including interest charges and
consumption (Garcia, 1980 and Slom, 1991), and effects on the money supply, banking
and retailing (Hirshman, 1982 and Mandell and Murphy, 1979). Other studies have
examined credit card use (Canner and Cyrnak, 1986; Hirshman, 1982 and Lindsay et
al., 1989) from a behavioural perspective as well as credit card possession (Hawes,
1988; Kinsey, 1981; Delener and Katzenstein, 1994).
The popularity of credit cards as a payment medium has been attributed to convenience
of not carrying cash and checks, the limited liability of lost or stolen cards and
additional enhancements (Chakravorti 1997 & 2000; Chakravoti and Emmons, 2001;
Whitesell, 1992). It was found that, credit cards are predominantly used for some types
of purchases, such as telephone and Internet transactions.
Despite this shortcoming, ease of use and convenience has made credit cards very
attractive to customers in developed countries, however, relative to other consumer loan
instruments, the interest rates charged on credit cards have historically been very high
and have changed very little over time. This high growth potential makes the credit card
markets very attractive for many institutions and therefore this crowded market is very
competitive compared to other forms of payment
20
Hence, these factors have captured the attention of several researchers from a variety of
disciplines such as economics, insurance, law, marketing and psychology since the
early 1970s to study credit cards, and therefore sizable body of literature has been
created on credit card ownership and usage (Kara et al., 1996). In addition, external
factors like economic, demographic and socio-economic factors are assumed to have
some impact on the credit card use while attitudes towards credit card use are assumed
to be input variables to credit card use.
Apparently, many studies have attempted to identify markets through the analysis of
demographic, socio economic, attitudinal, and or personality characteristics (Martell
and Fitts, 1981). Behavioral work has been descriptive or correlational and has
attempted to answer the question of “Who is the credit card user and what are their
demographic and socio-economic profiles?’ (Slocum and Mathews, 1970; Plummer
1971). Along with the development of user profiles, they also concentrated on the
analysis of broader economic issues pertaining to credit card demand and supply
(Hawes et al., 1978; Adcock et al., 1977; Martell and Fitts, 1981; Goldstucker and
Hirschman,1977; Kaynak and Yucelt, 1984; Hirschman, 1979; Kinsey, 1981).
2.1 Demographic and Socioeconomic Characteristics
Accelerating competition in the banking market has driven organizations
constantly to seek to produce unique services for distinct market segments. For
instance, most US banks offer a special bundled account designed to serve the
21
needs of young men and women just starting out. Several banks have also
designed checking accounts and certificate of deposit for young people up to the
age of 21 (Mason and Ezell, 1993). Segmentation has traditionally divided
customers by either user characteristics (i.e. demographics) or by user
behaviour. While demographic information can help to classify and perhaps
define the likelihood of purchasing, or data may be needed to help us
understanding actual buying behaviour (Paden et al., 1996).
That’s why demographic and socioeconomic analysis seems to be very
important in order to cater market segmentation. A number of behavioural
studies analyzed credit card possession (Glodstucker and Hirschman, 1977;
Hawes, 1988; Kinsey, 1981) and credit card use (Canner and Cyrnak, 1986;
Feinberg, 1986; Hirschman, 1982; Lindley et al.,1989; White, 1975).
Furthermore an empirical research study conducted in urban Turkey indicates
that there are certain relationships between socio-economic and demographic
characteristics of Turkish consumers and their cardholding and usage
behaviours (Kaynak et al., 1995)
Many studies have found age, sex and marital status to be significant
determinants of credit card selection and usage (Slocum and Mathews, 1970;
Kinsey, 1981). Likewise, occupation, education and income are accepted
generally as potentially significant correlates usage (Kara et al., 1996). Income
22
has been repeatedly found to have a positive effect on credit card usage, for both
bankcards and store cards (Heck, 1984).
Past credit literature also showed that there is a close relationship between credit
card usage and the level of economic development in a country. Historical
evidence also demonstrated that the rising income and the increased in the
purchasing power of the household are among the most significant factors
during the 1980s and 1990s that resulted in increasing demand for credit card
facilities (Kara et al., 1994). This is supported by Kaynak etal., (1995) indicates
that the widespread credit card usage in Middle Eastern country only began in
1989 when the country experienced a substantial degree of economic growth
and increased standards of living of people under economic liberalization
programs of the early 1980s. Past studies also indicate that the primary
determinants of credit card use are the income and education of the household
head as well as the family life cycle stage.
In other study, Canner and Cyrnak (1985 & 1986) examine more specifically
bank card holding and use patterns. They found a decline in the proportion of
families with two bankcard accounts between the years 1978 and 1983. They
also noted that the ‘heavy holder” segment is likely to hold a wide variety of
cards; that higher income and more financially sophisticated families are likely
to be credit cards holders; that Yuppies are very much into credit cards; and that
23
nearly half of all card holders use their cards primarily for “convenience”
purposes.
This is inline with Mandell (1972), which indicate that the primary determinants
of credit card use are the income and education of the household head as well as
the family life cycle stage. Families with higher incomes are more likely to use
credit cards than are lower income families. As family income is highly
correlated with the education of the family head, families with better-educated
heads are more likely than others to use credit cards and it is concluded that a
higher level of education is positively associated with a consumer’s
predisposition of credit usage. Furthermore, Lee and Kwon (2002) have found
that respondents with some college education were most likely to possess a
store card, followed by college graduates, high school graduates and
respondents with a graduate education.
This is supported by Kaynak et al., (1995) research done in Turkey found that
income and education was positively related to card usage while gender had a
negative influence on card usage. Another study by Choi and De Vaney (1995)
in the United States revealed the same, where education was positively related
to card usage, whilst gender was negatively related to card usage. However
other research by Lindley et al., (1989) discovered a positive relationship
between female respondents and the use of credit for the purchase of household
goods and clothing. Armstrong and Craven (1993) investigated the average
24
number of credit cards by gender and found that females tended to have a higher
average number of cards than males. According to MasterCard International,
recently conducted a consumer study indicated women in the Asia Pacific are
becoming increasingly important spenders due to numbers of women getting
tertiary education and entering the workforce.
Furthermore, in South-East Asia, there are 69 working women for every 100
working men. The ratio of women graduates to men in Malaysia is at 78:100.As
a result, the number of women traveling for both business and pleasure is on the
rise and there is now a new type of customer- the traveler shopper. Of this
group, the biggest spenders are aged from 59 to 79 years, with high disposable
funds as they draw pensions and often, that of their (deceased) spouses.
Other determinants of credit card use are related to the age of the family head
and the family lifecycle stage. Generally, those household heads who are in
middle and upper age ranges and who have major expenditures with a large
discretionary income level are more likely to use credit cards compared to the
other groups. Furthermore, in an earlier study by Barker and Sekerkaya (1992),
it was discovered that credit usage in Turkey appears to have attracted the
better-educated, middle aged and married members of the upper middle class.
On the other hand, several researchers have reported a negative impact of age
on credit card usage (Adcock et al., 1977; Awh and Waters, 1974). In addition,
Danes and Hira (1990) argued that the negative age impact might also reflect a
25
cohort effect. Older families may find credit cards less acceptable for financing
use compared to younger families who have grown up using credit cards. On the
other hand, Delener and Ktazenstein (1994) and Heck (1987) found that age was
positively related to store card usage. This is supported by other researcher
(Arora, 1987; Kinsey, 1981; Mandell, 1971) found that ease of payment was
significant by age with the 29 to 39 year olds considering it more important than
the others and nevertheless, middle age group seems to be the heaviest users and
to be very affected by the credit card revolution.
Marital status was found to be significant in determining consumer’s use of
bankcards and store cards (Delener and Katzenstein, 1994). Married
respondents had more bankcards and department store credit cards than singles
and separated or divorced respondents. A consistent result was found,
examining Asian and Hispanic consumers, in that the longer these respondents
were married, the more department store credit cards they possessed. Ingram
and Pugh (1981) examined consumer ownership and usage of bank credit cards
and found that young married couples, retired heads of households, sole
survivors, and single member households tend to own fewer bank credit cards.
Results also revealed that the level of household income and education are
positively associated with bank credit card ownership.
Previous researchers have also reported a significant relationship between
ethnicity and consumer’s credit behaviour and found that ethnic has a
26
significant effect on the probability of using bankcards instead of checks. White
(1975) explained that nonwhites might find it more difficult to obtain sufficient
credit, and is therefore more likely to use store cards as a means of financing
and they tend to use credit card as a means of installment credit and thus tended
to have more credit card debt. Belinger and Valencia (1982) indicated that
Hispanics were less likely to be credit card holders than Anglo-Americans.
Furthermore, Lindley et al., (1989) indicated that Anglos were more likely to
use credit cards as payment methods in all types of consumer purchases than
were Hispanics.
More recently, Metwally (2002) study the dual banking system in Qatar and the
impact of demographic factors on consumer’s selection of a particular bank,
concluding that the market position of any bank within such a system in a
developing country is likely to change with the process of development that
results in significant changes in age structure, level of education, job mobility
and standards of living.
Moreover, Avery et al. (1986) have found those credit cards were treated
merely as one of several forms of payment methods. Findings from these papers
further supported the strong positive correlation between income, education,
wealth, urbanicity, and “middle-age” and credit card use. Their summary
position was that ‘different means of payment have different uses that vary over
socioeconomic classes”. Finally, the possession and usage may vary across
27
individuals, for instance purchasing habits may differ among males and females
and individuals’ race may also affect. After all, we would expect more educated
persons to possess credit card than those who have been poorly educated. In
short the demographic characteristics of one individual may reveal information
about the credit card possession and their usage.
2.2 Possession and Usage of Credit Card
In recent years, credit card use and ownership have expanded around the globe
substantially, bringing a “buy now, pay later” philosophy to the forefront. This
pronounced attitude has increased purchases of all types as a result of the
growth of the credit usage, encouraging consumption that would not otherwise
take place. Apparently the relationship between spending desirability with
income earned experiencing dramatic changes in the past few years (Surtherland
and Canwell, 1994). Those with more disposable income discovered to indulge
with leisure and social activities. To some people it led them to incur debt credit
card, which allow them to spend beyond their means. It is becoming a trend that
consumers today live beyond their financial capacity, and not realizing that their
expenditures consistently exceed their income (Mapother, 1999).
Apparently, past studies have indicated that the ways the credit cards are being
used vary between those who use credit cards as a convenience and those who
use them as a regular source of revolving consumer credit (Peter and Olsen,
28
1994). In effect, every credit card transaction implies an interest free loan for at
least thirty days. Therefore, convenience use of credit cards can be positively
related to the higher age, income and relative financial liquidity of the
household head. In contrast, a liberal attitude toward borrowing can be
positively related to use of revolving credit (Canner and Cyrnak, 1986).
In addition, cross tabulation of the holders by professional also revealed that the
higher incomer earners were interested in transaction convenience rather than
installment buying (Barker and Sekerkaya, 1992; Plummer, 1971; Walker and
Sauter, 1974). It has been further pointed out that convenience use can be
positively related to household age, income and relative financial liquidity.
Moreover, it is approved that convenience users generally charge greater dollar
amounts per month than revolvers, and the amount charged per month for both
types of credit users rises with family income (Canner, 1988).
Danes and Hira (1990) investigated the relationship between knowledge, beliefs
and practices in the use of credit cards. They collected data during 1982 and
found that the respondents who believed that credit cards should be used for
installment reasons were inclined to use more credit cards and to accumulate
finance charges more often. Respondents who were older and those with low
incomes believed that credit cards should be used for convenience reasons. In
addition, credit cards are predominantly used for some types of purchases, such
as telephone and Internet transaction.
29
Besides the convenience factor, Kaynak et al. (1995) found that previous credit
card literature also showed that there is a close relationship between credit card
usage and the level of economic development in a country. As the economies of
the region move further toward privatization and as free market conditions
prevail, consumer incomes will increase, and a strong middle class will emerge,
hence the increase of credit usage (Lucas, 1991). Whereas, the work of Chan
(1997) highlighted that there is positive association between usage rate and
income. This is due to the fact that most of the card issuers normally grant a
higher credit limit among the higher income group. At the same time the
wealthier cardholders many times prefer to use credit card in their purchasing
transactions.
Many studies have concluded that the dramatic growth in credit card use since
the 1980s due to the change in attitude toward credit (Canner and Cyrnak, 1980;
Godwin, 1998; Norton 1993) such a change in attitude implies that consumers
are more willing to use credit to finance current consumption. In Greek the
majority of credit cards spending is concentrated on three types of purchases
namely clothing, special items and nightclubs. Clothing is the most frequent
type of purchase. It was found that credit card spending for purchase of clothing
is estimated to be 16 billion drachmas spent per year (Meidan and Davos, 1994).
Special items such as jewellery and furs are the second most frequent type of
purchase, with 7 billion drachmas spent per year followed by spending in
nightclubs and restaurants with 5 billion drachmas per year.
30
While in Turkey, it is reported that 71.6 percent were using bank credit cards to
purchase clothing, shoe, furniture and electrical appliance. It also found that
married respondents used bank credit cards more often than single (Delener and
Katzenstein). However in China, the credit cardholders more often used their
cards in restaurants, hotels or entertainment venues, rather than in shops as
discovered in Turkey (Worthington, 2003) due to several reasons as such not all
goods can be purchased by credit card.
Regarding types of credit cards they are use, in a cross-national study conducted
by Kaynak and Yucelt (1984), it was discovered that there were similar patterns
in ownership and use between Canadian and US credit cardholders. While US
users tended to rely more on bank credit cards than did Canadians, MasterCard,
Visa and Discover were found to be the most popular credit cards used in both
countries. The cards were used for purchasing goods and services and for
identification purposes, but most respondents did not use the cards to their
maximum potential (Kaynak and Yucelt, 1984). A contrast situation exists in
Japan where domestic credit card acceptance marques are more familiar than the
international marques of MasterCard or Visa, because the majority of credit
cards on issue are for domestic use only (Worthington, 1998).
In terms of using frequency, retail credit card users differ from bankcard users
in many ways. Consumers who have store credit card indicate that they send
about twice as much, and rate the store higher on customer service than
31
customers who do not have the card (Credit World, 1988). In addition, the
shopping frequency of consumers using store credit cards is significantly higher
than those shoppers without store credit cards, reflecting the tendency of store
credit holders to maintain loyalty to that store.
Further study by Kaynak et al. (1995), which examined the frequency of credit
card usage, found that majority of the Turkish credit cardholders used their
cards less than once a week. Females, higher educated people and the higher
income groups use their credit cards more often than do their counterparts.
However, age and job do not play a statistically significant role and the heaviest
users of credit card in Turkey are come from middle age (Arora, 1987; Kinsey,
1981). This is consistent with Chebat et al. (1988) reported that in Canada,
income and education are positively related to frequency of credit card usage.
According to Warwick and Mansfield (2000), study on college students
revealed that two-thirds of the students responding possessed at least one credit
card. Of those students who owned cards, 22.8 percent owned only one, 20
percent owned two credit cards, and almost 4 percent had over 5 credit cards.
Hayhoe et al., (2000) found that effective credit attitude influenced credit card
purchasing behaviour among college students. Students with higher effective
credit attitudes were more likely to purchase goods, such as clothes, electronic
items, entertainment, travel, gasoline and auto repair and food away from home,
with credit cards.
32
Although there is quite a lot of literature on credit cards usage internationally,
very limited published research is available in Malaysia. Most of the studies
have been conducted in the United States and other developed countries.
33
CHAPTER 3
METHODOLOGY, DATA AND VARIABLES
To accomplish the foregoing research objectives, the survey approach was adopted,
which contained multiple-choice questionnaire, requiring the respondent to give fixed
responses to the statements or questions asked. Shomaker and Mccombs (1989)
indicated that surveys have proven to be an effective way to assess people’s vote
intentions, to explain their votes, to predict use of products, and to assess changes in
opinions.
3.1 The Nature of Study
This study is a descriptive one in nature. According to Sekaran (1992),
descriptive study is undertaken in order to ascertain and to be able to describe
the characteristics of variables in situations and also undertaken to describe the
relevant aspects of the phenomena of interest to the researcher whether from an
individual, organizational, industry or other perspective. Descriptive analysis
will be used to discuss the possession and usage of credit card among staffs in
Universiti Utara Malaysia.
34
3.2 Sampling Method
3.2.1 Sample Size
A sample is a subset of the population. It comprises some members selected
from the population. By studying the sample, it would be able to draw
conclusions that would be generalized to the population of interest. In this
study, the sample consists of staff in UUM, who currently own a credit card in
their name. A number of 235 staffs from various faculty, department, centre and
unit (see Appendix 1) were selected as a sampling frame. Sample was randomly
selected from the list of faculty, department, centre and unit members available
on UUM website.
This study uses non-probability sampling design such as, convenience sampling
method in order to choose sample of the population (Kerlinger, 1973) and
confidence in determining sample size proposed by Krejcic and Morgan (1970).
Respondents who took part in the survey were not selected by any criteria. They
were selected randomly based on the elements of convenience and accessibility.
3.3 Data Collection Technique
In this study, data is obtained from both primary and secondary sources. Early
studies have been done through secondary sources to gather all the related
35
information to support the literature review and process of building the
questionnaire.
3.3.1 Primary Source
This study depends heavily on data from the primary sources via mail surveys.
The data are gathered from the relevant respondents by sending the
questionnaire via internal mail. The questionnaires are mailed to 235 staffs
along with self-addressed, return envelopes including cover letter explaining the
purpose of the study. The sample comprises of 117 academic staff and 118 non-
academic staff. The technique employed also has its own unique advantages.
For instances, in situations where an appropriate sampling frame is available,
mail surveys always render a more representative sample than mall intercepts
(Churchill, 1992).
After three weeks waiting period, the questionnaires are retrieved from the
respondents. Of a total of 120 questionnaires returned, only 3 could not be used
due to incompleteness and inconsistencies. Final analysis is based on 117,
which was considered as complete, acceptable and usable, yielding 49.79
percent response rate. This response rate is quite high which is acceptable by
social science standards. This contradicts with the findings by Steeh (1981) that
stated low response rate generally associated with mail surveys. In addition,
emphasis is placed on confidentiality by guaranteeing anonymity of
36
respondents’ names. The main content of the questionnaire was related to
customers’ demographic, socioeconomic, possession and usage of credit card.
3.3.2 Secondary Source
Secondary sources are used to support and strengthen the study outcome. Data
from secondary sources will help the researcher to have in-depth knowledge
about the research topic. Secondary data are obtained through an extensive
library research, particularly from journals and articles and published reports of
the other researchers. Information are also gathered from reports such as the
Bank Negara Malaysia Annual Report, magazines and newspapers, pamphlets
published by banks and Internet (bank websites) as well as on-line journals from
Emerald Intelligence and Ebsco-Host.
3.4 Development of Questionnaire
A questionnaire was first developed and pre-tested using a sample of 50 credit
cardholders, which were staff members of Faculty of Finance and Banking,
UUM. After making the necessary modifications, the final questionnaire was
generated. The research instrument consists of a self-administered closed end
structured question, which is divided into three parts. The first part is used to
gather the demographic and socioeconomic information of the sample. The
second and third parts of the questionnaire are concerned with the information
37
related to the possession of credit card and usage of credit card among UUM
staffs respectively.
3.4.1 Layout
The questionnaire is logically structured to make completion
straightforward. The format is designed to promote quick and simple
responses by just ticking appropriate answer. Three separate sections of
the questionnaire, which are used in the data analysis, are reported
herein.
The first section of the questionnaire is designed to collect relevant
demographic and socioeconomic information from each respondent.
Such information included gender, race, age, marital status, number of
dependency, years working in UUM, monthly income and job category.
The respondent demographic and socioeconomic characteristics chosen
for this study are slight revisions of those criteria found to be statistically
significant in an earlier study. Gender is included because women seem
to be having greater impact on financial services decisions as they
achieved greater social liberalization (Anderson et al., 1976). Responses
to this first section of the questionnaire are designed to permit analysis
of the first research objective included in the study.
38
According to the research done by Maysami and Williams (2002) they
found that 56.1% cardholders in Singapore were male and the rest are
female. With regard to level of education, 45.9% of the respondents
have degree and married. The majority of the cardholders work in
offices (professional, manager and executive) with 47.8% cardholder’s
personal annual income were between S$30,000-S$39,999.
Other study has found that likely credit cardholders came from higher
income and more financially astute families. However, the major reason
for use was convenience and this factor was positively correlated with
financial liquidity, income and age Canner and Cyrnak (1985, 1986). In
addition, the study carried out by Martell and Fitts (1981) and Kaynak et
al. (1995) also showed that bank credit cardholders normally had higher
income, were better educated, owned multiple bank accounts and
employed a stable pattern of banking.
The second section includes questions pertaining to the number of credit
card owned, usage frequency of credit card, types of credit card and
factors that motivate the respondent to select a credit card. Past credit
card literatures indicated that there is a high correlation between
increased income level and rate and frequency of credit card usage
(Garcia, 1980). Further, questions such as what factors that motivate the
39
respondent to own a credit card and how did they find out information
about their credit card also incorporate in this section.
The final section is designed to generate data concerning the credit
card’s usage. In order to answer the research objective, questions such as
usage frequency, rationale for using credit card, their involvement in
online purchase, reasons for using credit card, knowledge about the
interest charged, terms and condition applied on credit card are asked. In
addition, question such as the amount spent every month via using credit
card and choice of payment are also included.
Respondents are assured of complete confidentiality in answering all the
questions. The questionnaire is written in English. A copy of the survey
instrument is attached in Appendix 2.
3.5 Data Analysis
The responses to the credit card’s possession and usage among staff in UUM are
analyzed using Statistical Package for the Social Sciences (SPSS). An
exploratory study is conducted using descriptive frequencies and percentages to
describe the data obtained.
40
CHAPTER 4
FINDINGS AND ANALYSIS
4.1 The Demographic and Socioeconomic Characteristics
The analysis is based on usable responses received from 117 respondents. The
first section describes the analysis of frequency of demographic and
socioeconomic characteristics of the respondents. The results are shown in the
form of tables and figures, which are easier to understand and to analyze.
4.1.1 Gender
With respect to gender, the 117 sample respondents are evenly
distributed between two major gender categories. The sample contains
52.1% males and the rest were females (47.9%). With regards to
quantity, 61 respondents are males while 56 respondents are females.
Hence, the potential results of this analysis will show whether there are
any significance differences between male and female respondent’s
credit card possession and usage.
41
Table 4.1.1: Respondent Profiles by Gender
4.1.2 Race
Obviously, our respondents participated in this study come from two
major races that is Malay and Indian. It is clear from Table 4.1.2 that
majority of the respondents are Malays with a total of 114 respondents
or 97.4%, followed by Indians with a total of 3 respondents (2.6%)
respectively. The main reason is, majority of the staff are Malay and
only a small group, which represents Chinese, Indian and others.
Table 4.1.2: Respondent Profiles by Race
Characteristics Percentage
Malay
Indian
97.4
2.6
Total 100.0
Characteristics Percentage
Male
Female
52.1
47.9
Total 100.0
42
4.1.3 Age
There are six different categories of respondent’s age, comprising of age
of 26 to 30 years old, 31 to 35 years old, 36 to 40 years, 41 to 45 years
old, and above 45 years old. It is obvious that respondents of age
between 26 to 40 years old dominate the sample distribution amongst the
five major age categories, as displayed in Table 4.1.3.
Table 4.1.3: Respondent Profile by Age
Characteristics Percentage
26-30 years
31-35 years
36-40 years
41-45 years
Above 45 years
35.9
35.0
17.9
0.9
10.3
Total 100
Most of the respondents are from the age of 26 to 30 years and 31 to 35
years with a total of 42 (35.9%) and 41 (35%) respectively. This means
that the respondents’ age is evenly distributed between the two major
age categories mentioned. About 21 or 17.9% represent respondents of
age 36 to 40 years. The other 1 respondent (0.9%) and 12 respondents
(10.3%) belong to age group between 41 to 45 years old and above 45
years old respectively.
43
4.1.4 Marital Status
Respondents who are married were the most, contributing 80.3% (94
respondents) as opposed to 19.7% (23 respondents) single. This variable
is important because most of the previous studies found that married
respondent is significant to the credit card usage and ownership.
Table 4.1.4: Respondents Profiles by Marital Status
Characteristics Percentage
Single
Married
19.7
80.3
Total 100.0
4.1.5 Number of Dependency
For this question, only 106 respondents participated while the rest were
not choosing any of the categories given. Obviously the results are
evenly distributed among the four categories. It appears that the highest
is 24.8%, with the number of dependency is three, followed by 23.9%
with one dependency and 22.2% respondents with more than four
dependents. Finally, the rest 19.7% of the total respondents have two
dependents.
44
Table 4.1.5: Respondents Profiles by Number of Dependency
Characteristics Percentage
One
Two
Three
Four and Above
23.9
19.7
24.8
22.2
Total 100.0
4.1.6 Years Working in UUM
With regard to the number of years working in UUM, it is found that the
respondents with 3 to 5 years working in UUM are the majority (41.1%).
It is followed by those with 5 to 10 years representing 23.9% of the total
respondents. Only 17.1% and 17.9% of the respondents have been
working below 3 years and above 10 years in UUM respectively.
Table 4.1.6: Respondents Profiles by Years Working in UUM
Characteristics Percentage
Below 3 years
3-5 years
5-10 years
Above 10 years
17.1
41.1
23.9
17.9
Total 100.0
45
4.1.7 Level of Income
Subsequently the most important part of respondent profile is monthly
income. Findings in this section are expected to correlate with the usage
and possession of credit card as reported earlier. According to Bank
Negara Malaysia, minimum annual income eligibility criteria for credit
cards is RM18,000 or RM1,500 per month. As displayed in Table 4.1.7,
approximately 59.8% of respondents earns between RM 3001 to 5000
and 19.7% have monthly income of more than RM 5001. It can be
concluded that respondents with an income level between the range of
RM 3001 to RM 5000 per month contributed the most participation in
this study.
Table 4.1.7: Respondent Profiles by Monthly Income
Characteristics Percentage
RM1500-RM2000
RM 2001 to 3000
RM 3001 to 5000
RM5001 above
12.0
8.5
59.8
19.7
Total 100.0
46
4.1.8 Job Category
Interestingly, as shown in Table 4.1.8, the majority of the respondents
comprise of academician including tutor and language teacher, which
represents approximately 88.9% or 104 of the total number of
respondents working in UUM. Jobs such as accountant, registrar,
assistant registrar, executive officer, secretary and clerk are classified
under management staff. Management staff only represents 11.1% of the
respondents or 13 in terms of number.
Table 4.1.8: Respondent Profiles by Job Category
4.1.8 Level of Education
Based on Table 4.1.9, majority of respondents are found to hold Masters
Degree, which represent 73.5% of the total sample or 147 respondents
while 18.8% or 22 respondents with PhD. Further were a total of 9.4%
or 11 respondents holding a diploma. The rest 1.7% or 2 respondents
Characteristics Percentage
Academician
Management
88.9
11.1
Total 100.0
47
hold bachelor degree. As expected, many respondents possess a higher
level of education since majority of the respondents are academic staffs.
This type of respondents is expected to have more exposure to the
financial and banking matters in order to fulfill their financial needs.
Table 4.1.9: Respondent Profiles by Level of Education
4.2 Possession of Credit Card
Section B of the questionnaire is designed to study the possession or ownership
of credit card among staffs in UUM.
4.2.1 Credit Card Possession
Nowadays, people prefer to own a credit card because credit card is a
convenient payment mode as it can be readily used for making purchases
at merchant outlets. Table 4.2.1 shows the number of respondents that
Characteristics Percentage
Diploma
Bachelor Degree
Masters Degree
PhD
9.4%
1.7%
70.1%
18.8%
Total 100.0
48
currently possess the credit cards and almost all them (99.1%) own a
credit card.
Table 4.2.1: Number of Respondents that Possessed Credit Cards
Possession Percentage
Yes
No
99.1
0.9
Total 100
4.2.2 Number of Credit Cards Owned
The number of credit card owned by the respondents is presented in
Table 4.2.2. More than half of the respondents (55.3%) favor to possess
two credit cards at one time. However, about 10.5% of respondents
prefer to own at least four or more credit cards.
Table 4.2.2: Number of Credit Cards Owned by Respondents
Number Percentage
One
Two
Three
Four or more
23.7
55.3
10.5
10.5
Total 100
49
4.2.3 Number of Credit Cards Used Regularly
Even though more than three quarter of the respondents has at least two
cards and more, about half of the respondents only used one card
regularly. This result could be due to the convenience factor, which
make it easy for them to monitor their expenditures and make payment
at one spot. Table 4.2.3 also shows that few respondents who used three
cards or more than three cards regularly, whereby the percentage is only
6.9% and 3.4 % respectively.
Table 4.2.3: Number of Credit Cards Used Regularly
Number Percentage
One
Two
Three
More than three
50.0
39.7
6.9
3.4
Total 100
4.2.4 Types of Credit Cards Owned
Regarding types of credit cards owned by the respondents, almost 95%
of the respondents prefer to possess a Master Card compared to Visa
(69%), American Express (1.7%). Table 4.2.4 shows that none of the
respondent possess Diners Club or other types of cards.
50
Table 4.2.4: Types of Credit Cards Owned
Types Percentage
Visa
MasterCard
American Express
Diners Club
Others
69.0
94.8
1.7
0.0
0.0
4.2.5 Preference of Credit Cards
The credit line provided by the Islamic credit card has attractive and
competitive features as those of conventional credit card issuers.
Therefore, more financial institutions are now offering the facility as an
alternative to conventional credit card. Based on Table 4.2.5, 69.4% of
the respondents prefer to have both Islamic and conventional credit
cards rather than sticking to one type only, either Islamic credit card or
conventional credit card.
Table 4.2.5: Preference of Credit Cards
Types Percentage
Conventional
Islamic
Both
6.3
24.3
69.4
51
4.2.6 Selection Criteria of a Credit Card
It is important to choose the right card. As a general rule, those who pay
in full each month may select for a standard higher-rate card, while those
who carry a balance in their monthly statement, are better off paying a
small fee for a low-interest-rate card. As represented by Table 4.2.6, it
shows that credit card that offer free subscription or no joining fee is the
main criteria in selecting a credit card (80.7%). Apart from that,
attractive credit limit is another main factor for the respondent to choose
the credit card (68.4%). The least important criteria in the credit card
selection is the level of cash advances, which contributes only 9.6%.
Table 4.2.6: Selection Criteria of a Credit Card
Criteria Percentage
Free subscription
Attractive payment terms
Attractive prizes / lucky draw
Faster application approval
Quality loyalty program
Attractive credit limit
Level of cash advances
80.7
34.2
42.1
44.7
14.0
68.4
9.6
52
4.2.7 Purpose of Possessing Credit Card
There are a few reasons for possessing a credit card. As showed in Table
4.2.7, 86.2% of the respondents indicate that the main reason of owning
the credit card is for their own convenience whereby it enables the
respondents to make purchases of goods and services at any time instead
of using cash. Only 16.4% of the respondents feel that, by possessing a
credit card, it represents or indicates the prestige that they have. This
condition may be applicable for those who owned platinum cards since
the qualification to possess platinum card is very high.
Table 4.2.7: Purpose of Possessing Credit Card
Purpose Percentage
Convenience
Indication of prestige
Sense of security variables
Economic variables
Global acceptance
86.2
16.4
19.8
44.8
38.8
4.2.8 Sources of Information on Credit Card
The information about credit card mostly comes from friends and
relatives (61.2%) rather than marketing strategy (54.3%) conducted by
53
banks. This shows that friends and relatives are more reliable because
these people can really share their valuable experience with the
respondents especially on the advantages and disadvantages of
possessing a credit card. As indicates in Table 4.2.8, internet networking
seems to be the least effective source of information on credit card
whereby the percentage is only 10.3%.
Table 4.2.8: Sources of Information on Credit Card
Sources Percentage
Television
Magazine
Internet
Friends and relatives
Sales representative
Bank’s marketing strategy
18.1
45.7
10.3
61.2
44.0
54.3
4.2.9 Co-branded Credit Card
A co-branded credit card is a card, which issued jointly by a credit card
issuer and a merchant under a well-known brand name. The merchant
normally offers additional benefits to the cardholders, such as discount
on certain products and reward points for the purchases made. As
presented in Table 4.2.9, 42.7% prefer co-branded credit card. When it
54
comes to the selectivity of co-branded credit cards, 67.7% of the
respondents indicate that the bank involved and the brand or outlet
involved are the main concerned as showed in Table 4.2.10.
Table 4.2.9: Preference of Co-branded Credit Card
Preference Percentage
Yes
No
Not sure
42.7
21.4
35.9
Table 4.2.10: Consideration Factors of Co-branded Credit Card
Factors Percentage
Bank involved
Brand / Outlet involved
Both
17.2
15.2
67.7
4.3 Usage of Credit Card.
Section C of the questionnaire is designed to study the credit card’s usage
among staffs in UUM.
4.3.1 Monthly Usage Frequency
Frequency of credit card usage is unlimited as long as credit
cardholder’s make the minimum monthly repayment on time and total
55
monthly expenditure not exceeding their credit limit as offered by the
credit card’s provider. Most of the respondents (47.4%) use their credit
card between 4 to 5 times every month to meet their need and another
37.1 % respondents using their credit card less than 3 times a month.
Interestingly, there are 2 respondents (1.7%) use their credit cards more
than 15 times a month while 13.8% of respondents actively using their
credit cards between 6 to 10 times a month.
Table 4.3.1: Frequency of Monthly Credit Card’s Usage
Usage Percentage
Less than 3 times
4 – 5
6 – 10 times
More than 15 times
37.1
47.4
13.8
1.7
Total 100
4.3.2 Use of Credit Card
The use of credit card varies from one person to another. In general,
most of the respondents i.e. 80.3% (94 respondents) use their credit card
for petrol and fuel. As most of the respondents are academicians who
usually attend seminar and conferences to participate or present papers,
credit card is the most convenient and safest way to be used when
traveling. 56.4% respondents used their credit cards for the purpose of
56
traveling. This is followed by using credit card for shopping, buying
groceries, paying utility bills, leisure, financing and dining which are
45.3%, 37.6%, 29.9%, 23.9%, 12% and 6.8% respectively.
Table 4.3.2: Types of Credit Card’s Usage
Use Percentage
Leisure
Dining
Traveling
Shopping
Financing
Groceries
Utilities
Petrol and fuel
23.9
6.8
56.4
45.3
12
37.6
29.9
80.3
4.3.3 Usage of Credit Card for Online Purchase
More than half of respondents (51.7%) use their credit cards for online
purchase. Most of them use their credit cards to pay for purchase of
online tickets (46.2%), and booking a hotel room (40.2%). Other than
that, they are using their credit cards to buy books (28.2%), purchase
software (17.1%) and banking purposes (17.1%). Some of the
respondents paying their loan by using their credit cards (12.8%). Only
9.4% and 3.4% of the respondents use their credit card for paying their
subscription and buying apparel respectively. It can be concluded that
the usage of credit card for online purchase is closely related to the
57
career need of the respondents, which are traveling and booking hotel
rooms.
Table 4.3.3: Type of Online Purchase by Credit Card
Type of Usage Percentage
Buy books
Buy flowers and gifts
Buy software
Buy apparel
Pay subscription
Loan repayment
Book hotel rooms
Book online tickets
Banking purposes
28.2
0
17.1
3.4
9.4
12.8
40.2
46.2
17.1
4.3.4 Customer’s Concern on Interest Charged
Credit cardholder’s are charged 18% interest per annum (1.5% monthly)
for every balance outstanding of their credit usage. 91 respondents
(82%) do concern about interest charged on their credit card while
13.5% of respondents did not. 5 respondents (4.5%) are not sure about
interest charged on their credit card’s usage. Lack of concern over
interest charged on credit card could cause a high outstanding balance,
which could bring to an excessive burden on customer’s monthly
repayment amount.
58
Table 4.3.4: Concern over Interest Charged on Credit Card
Customer’s Concern Percentage
Yes
No
Not sure
82.0
13.5
4.5
Total 100
4.3.5 Motivating Factor of Credit Card Usage
Ease of use becomes the most motivating factor that motivates
respondents to use a credit card. 75.9% of respondents hold a credit card
as it is very easy to use especially in assisting their purchasing need.
Besides that, larger acceptances (14.7%) also motivate respondents to
use a credit card while sense of security becomes the least motivating
factor for credit card’s usage among respondents (9.5%). Surprisingly,
prestige is not a motivating factor for credit card’s usage among
respondents of this study.
Table 4.3.5: Factors Motivating Credit Card’s Usage
Factor Percentage
Ease of use
Large acceptances
Sense of security
Prestige
75.9
14.7
9.5
0
Total 100
59
4.3.6 Planning on Credit Card’s Usage
Almost all the respondents have planning for their credit card usage.
This is due to their understanding on the terms and conditions of their
credit cards. 95.7% of respondents say that they plan their credit card’s
usage while only 4.3% did not plan their usage of credit card.
Table 4.3.6: Plan on Credit Card’s Usage
Planning Percentage
Yes
No
95.7
4.3
Total 100
4.3.7 Monthly Spending Amount on Credit Card
Amount spent every month using a credit card ranges between below
RM500 to more than RM2,001. Most of the respondents of this study
spend less than RM1,000 every month via their credit cards. 63.5% use
their credit card with a monthly consumption less than RM500 while
31.3% spend between RM501 to RM1,000 every month by credit card.
Only 3.5% and 1.7% of respondents spend around RM1,001 to RM1,500
and RM1,501 to RM2,000 on their credit card respectively. There is no
respondent who charges more than RM2001 per month on their credit
card.
60
Table 4.3.7: Credit Card’s Monthly Spending Amount
Spending amount Percentage
Below RM500
RM501 – RM1,000
RM1,001 – RM1,500
RM1,501 – RM2,000
Above RM2,001
63.5
31.3
3.5
1.7
0
Total 100
4.3.8 Highest Credit Limit Offered
Credit limit is the highest payable amount offered to the credit card
holders and is usually determined by assessing the credit cardholder’s
monthly or annual income and tenure of holding a credit card. Minimum
monthly income for credit cardholder’s as determined by Bank Negara
Malaysia (BNM) is RM1,500.
Table 4.3.8: Credit Limit Offered to Respondents
Credit limit Percentage
Below RM5,000
RM5,001 – RM10,000
RM10,001 – RM15,000
Above RM15,000
12.9
54.3
15.5
17.2
Total 100
61
Approximately 54.3% of the respondents have a credit limit between
RM5,001 to RM10,000 as most of the respondents of this study have a
monthly income of RM3,001 to RM5,000. About 17.2% of respondents
get a credit limit above RM15,000 while respondents with a credit limit
of below RM5,000 and between RM10,001 to RM15,000 are 12.9% and
15.5% respectively. It can be concluded that most of the respondents are
academician in the category of income between RM 3,001 to RM5,000
with a credit limit range between RM5,001 to RM10,000.
4.3.9 Credit Card’s Settlement
Almost 70% of respondents did not pay the entire amount spent on their
credit cards every month. 29.9% of respondent usually pay balance due
in full while 31% of them always pay balance due in full and 38.8%
rarely pay their balance due in full. On the question whether they made
the repayment on time every month, 96 respondents (82.8%) make their
repayment on time every month. Only 3 respondents (2.6%) did not
make the repayment on time every month. This is probably due to the
repayment channel that may require credit cardholder to make payment
via cheque and other means especially where there are limited numbers
of branches of credit card’s providers.
62
Most of the respondents (77.6%) pay above the minimum payment every
month while the rest making only a minimum payment for their credit
card’s usage. Due to on time payment made by most of the respondent,
only 38 respondents (32.8%) have been charged late payment fees by
credit card’s provider. 74.1% of respondents rarely make the repayment
after the bill’s due date. This is due to their understanding on the terms
and conditions of using a credit card as more than half respondents state
that they understand all terms and conditions in using a credit card.
98.1% of respondent rarely spent beyond their credit limit.
4.3.10 Use of Cash Advance Facility
On the matter of cash advance facility offered by the credit card’s
provider, most of respondents (69.8%) did not use the facility. Only
30.2% of the respondents use the cash advance facility and 45.4% of
them utilize the facility to finance their need. Most of them use the
facility less than 3 times per year (78.4%) with the amount of cash
advance is less than RM1,000 (83.3%). Only 4 respondent (11.1%) use
cash advance between RM1,001 to RM1,500 per year and 2 respondents
(5.6%) utilize cash advance more than RM2,000 per year.
63
CHAPTER 5
CONCLUSION
In this study, we have found the relevant information about the demographic and
socioeconomic characteristics among credit cardholders in UUM. We have also found
the information on the possession or ownership of credit card and usage of credit card
among credit cardholders that work in UUM.
There are several demographic variables that have been found significant in describing
consumer practice in the use of credit cards: gender, education, income, age, ethnic
background and credit card type. On the other hand, it should be understood that credit
card companies usually choose to issue their cards to pre-selected groups of individuals.
Not surprisingly, these individuals are typically upper income, well educated and hold
highly regarded occupations during the growth stage of credit card markets.
This study found out that almost all of the respondents possessed a credit card and
majority of them hold two credit cards at one time. With the various types of credit
cards available in the market, Master Card seems to be the most preferred credit card to
be possessed. Apart from that, free subscription features play an important role for the
respondents during credit card selection process whereby the main purpose of
possessing credit cards is for their convenience rather than to show their prestige.
64
Most of credit cardholders in UUM used their credit card between 4 to 5 times a month
for petrol and fuel. Half of them use their credit card for online purchase especially for
buying online tickets, booking a hotel room and purchasing books. Almost all of the
respondents are concerned about interest charged on their credit cards and make a
proper planning on their credit card usage. This is due to their understanding on terms
and conditions of the credit card that they possessed. Half of the respondents being
offered a credit limit between RM5,001 to RM10,000. Most of them spend below
RM1,000 per month with nearly 60% of them pay their balance due in full and on time
(82.8%). There are only 30.2% of respondents who use a cash advance facility with
most of them used the facility less than 3 times per year amounted to less than
RM1,000.
65
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APPENDIX 1
LIST OF FACULTY, DEPARTMENT, CENTRE AND UNIT AVAILABLE IN UUM.
Source: http://www.uum.edu.my
FACULTY
1. FACULTY OF ECONOMICS
2. FACULTY OF FINANCE AND BANKING
3. FACULTY OF COMMUNICATION AND MODERN LANGUAGES
4. FACULTY OF HUMAN AND SOCIAL DEVELOPMENT
5. FACULTY OF INTERNATIONAL STUDIES
6. FACULTY OF PUBLIC MANAGEMENT AND LAW
7. FACULTY OF TOURISM MANAGEMENT AND HOSPITALITY
8. FACULTY OF BUSINESS MANAGEMENT
9. FACULTY OF MANAGEMENT OF TECHNOLOGY
10. FACULTY OF ACCOUNTANCY
11. FACULTY OF COGNITIVE SCIENCES AND EDUCATION
12. FACULTY OF QUANTITATIVE SCIENCES
13. FACULTY OF INFORMATION TECHNOLOGY
DEPARTMENT, CENTRE AND UNIT
1. REGISTRAR'S DEPARTMENT
2. BURSAR'S DEPARTMENT
3. SULTANAH BAHIYAH LIBRARY
4. ACADEMIC AFFAIRS DEPARTMENT
5. STUDENT AFFAIRS DEPARTMENT
6. RESEARCH & INNOVATION DEPARTMENT
7. DEVELOPMENT AND MAINTENANCE DEPARTMENT
8. SECURITY DEPARTMENT
9. PUBLIC RELATIONS DEPARTMENT
10. ENTREPRENEURSHIP DEVELOPMENT INSTITUTE (IPK)
11. INSTITUTE OF TUN DR MAHATHIR'S THOUGHTS (IPDM)
12. QUALITY MANAGEMENT INSTITUTE (IPQ)
13. COMPUTER CENTRE
14. CENTRE FOR GRADUATE STUDIES
15. EXECUTIVE DEVELOPMENT CENTRE
16. CENTRE FOR PROFESSIONAL & CONTINUING EDUCATION (PACE)
17. UNIVERSITY TEACHING AND LEARNING CENTRE (UTLC)
18. PRACTICUM CENTRE
19. UNIVERSITY HEALTH CENTRE
20. KEDAH MAJU UNIT
21. UNIUTAMA MANAGEMENT HOLDINGS SDN. BHD
22. INTERNAL AUDIT UNIT
APPENDIX 2
1
FACULTY OF FINANCE AND BANKING
UNIVERSITI UTARA MALAYSIA
Questionnaires
Credit Card’s Possession and Usage among Staff in UUM.
Dear Prof./ Asst. Prof./ Dr./ Mr./Mrs. This study is conducted to explore the issue of possession (ownership) and usage of credit
card among UUM’s staffs. The information that you give in this survey is only for research
purpose and will be kept strictly confidential. Any research reports will only include group
level data, which cannot be traced back to individuals. All answers will be fully
confidential and shall be used for academic purposes only. Your participation is highly
appreciated and thank you very much for your time and cooperation towards this study.
Researcher;
Shafie Mohamed Zabri (Ext:4373/[email protected])
Juhaida Abu Bakar (Ext:6421/[email protected])
Fikriyah Abdullah (Ext:6443/[email protected])
APPENDIX 2
2
PART A – DEMOGRAPHIC AND SOCIOECONOMIC INFORMATION.
1. Gender [ ] Male [ ] Female
2. Race [ ] Malay [ ] Chinese
[ ] Indian [ ] Others (Please specify) ___________.
3. Age [ ] 25 & below [ ] 36 – 40
[ ] 26 – 30 [ ] 41 – 45
[ ] 31 – 35 [ ] Above 45 years
4. Marital Status [ ] Single [ ] Married [ ] Single parent
5. Number of dependency [ ] One [ ] Two
[ ] Three [ ] Four and above
6. Years working in UUM [ ] Below 3 years [ ] 3 to 5 years
[ ] 5 to 10 years [ ] Above 10 years
7. Personal monthly income [ ] RM1,500 to RM2,000
[ ] RM2,001 to RM3,000
[ ] RM3,001 to RM5,000
[ ] RM5,001 and above
8. Category of staff. [ ] Academician
[ ] Management staff
[ ] Others (Please specify) ___________.
9. Educational background [ ] Diploma [ ] Bachelor Degree
[ ] Master Degree [ ] PhD/Doctoral
[ ] Others (Please specify) ____________.
APPENDIX 2
3
PART B – POSSESSION (OWNERSHIP) OF CREDIT CARD.
1. Do you own a credit card? [ ] Yes
(If your answer is No, please proceed to Question 6) [ ] No
2. Number of credit card owned [ ] One
[ ] Two
[ ] Three
[ ] Four or more
3. Number of credit cards used regularly [ ] One
[ ] Two
[ ] Three
[ ] More than three
4. Which credit cards owned [ ] Visa
[ ] MasterCard
[ ] American Express
[ ] Diners Club
[ ] Others.(Please specify) ___________.
5. Do you have a supplementary card? [ ] Yes [ ] No
6. Would you apply online for credit card? [ ] Yes [ ] No
7. Intention to use a credit card in the near future? [ ] Yes [ ] No
8. Preferred credit card [ ] Conventional
[ ] Islamic
[ ] Both
9. Choice of credit card [ ] Local bank
[ ] Foreign bank
[ ] Both
10. What motivate you to select a credit card? [ ] Free subscription/no charge
(You may [ ] more than one answer) [ ] Attractive payment terms
[ ] Attractive prizes/lucky draw
[ ] Faster application approval
[ ] Quality loyalty programme
[ ] Attractive credit limit
[ ] Level of cash advances
[ ] Others. Please specify________.
APPENDIX 2
4
11. What motivate you to own a credit card? [ ] Convenience of use in Malaysia
(You may [ ] more than one answer) [ ] Indication of prestige
[ ] Sense of security variables
[ ] Economic variables
[ ] Global acceptances
12. Where did you find info about your credit card? [ ] TV
(You may [ ] more than one answer) [ ] Magazine
[ ] Internet
[ ] Friends and relatives
[ ] Sales representative
[ ] Bank’s marketing
13. Would you prefer co-branded credit card*? [ ] Yes
[ ] No
[ ] Not sure
14. What determine your decision on selecting co-branded credit cards?
[ ] The bank involved
[ ] The brand/outlet involved
[ ] Both
* Co-branded credit card is a credit card issued by the financial institutions involving collaboration with the brand/outlet
owner for example, Air Asia MasterCard (RHB), MTV Credit Card (Hong Leong Bank), Makro Visa (Maybank), PB
Manchester United MasterCard and etc.
PART C – CREDIT CARD’S USAGE
1. How frequent did you use your credit card every month?
[ ] 3 times and below
[ ] 4 to 5 times
[ ] 6 to 10 times
[ ] 11 to 15 times
[ ] Above 15 times
2. Use of credit card (You may [ ] more than one answer)
[ ] Leisure [ ] Dining
[ ] Traveling [ ] Shopping
[ ] Financing [ ] Grocery purchase
[ ] Utilities [ ] Petrol and fuel purchase
[ ] Others. Please specify _____________.
3. Do you use credit card for online purchase? [ ] Yes [ ] No
APPENDIX 2
5
4. What kind of online purchases with credit card? (You may [ ] more than one answer)
[ ] Buy books [ ] Buy flowers and gifts
[ ] Buy software [ ] Buy apparel
[ ] Pay subscription [ ] Loan repayment
[ ] Book hotel rooms [ ] Book online tickets
[ ] Banking purposes [ ] Others. Please specify ___________.
5. Do you concern about interest/profit charged on credit card? [ ] Yes
[ ] No
[ ] Not sure
6. Motivating factors for credit card purchase [ ] Ease of use
[ ] Large acceptances
[ ] Sense of security
[ ] Prestige
7. Did you plan/manage your credit card usage? [ ] Yes [ ] No
8. How much did you spent every month on credit card? [ ] RM500 and below
[ ] RM501 to RM1,000
[ ] RM1,001 to RM1,500
[ ] RM1,501 to RM2,000
[ ] RM2,000 and above
9. Highest credit limit offered to you? [ ] RM5,000 & below
[ ] RM5,001 to RM10,000
[ ] RM10,001 to RM15,000
[ ] Above RM15,000
10. Did you pay the entire amount used on your credit card every month?
[ ] Yes [ ] No
11. Do you pay balance due in full? [ ] Usually
[ ] Always
[ ] Rarely
12. Did you made the repayment on time every month? [ ] Yes
[ ] No
[ ] Not sure
[ ] Sometimes
13. Are you only making the minimum payment every month? [ ] Yes [ ] No
14. Have you ever been charged late fees? [ ] Yes [ ] No
APPENDIX 2
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15. How often do you pay your bill late? [ ] Usually
[ ] Always
[ ] Rarely
16. Did you understand all the terms and conditions in using credit cards?
[ ] Yes [ ] No [ ] Not sure
17. Have you ever use the cash advances facility? (If your answer is No, please proceed to Question 21)
[ ] Yes [ ] No
18. Do you take cash advances as the source to finance your need?
[ ] Yes [ ] No
19. How often do you get cash advances (per year)? [ ] Below 3 times.
[ ] 4 to 5 times
[ ] 6 to 10 times
[ ] More than 10 times.
20. Average size of cash advances? [ ] RM500 and below
[ ] RM501 to RM1,000
[ ] RM1,001 to RM1,500
[ ] RM1,501 to RM2,000
[ ] RM2,000 and above
21. How often do you exceed the credit limit? [ ] Usually
[ ] Always
[ ] Rarely
THANK YOU ☺
