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APJML
24,2 Factors affecting credit card
use in India
Arpita Khare
236 Indian Institute of Management-Rohtak, Rohtak, India
Anshuman Khare
Received 16 May 2011 Department of Operations Management & Sustainable Development,
Revised 12 October 2011
Accepted 18 November 2011
Athabasca University, St Albert, Canada, and
Shveta Singh
India Institute of Technology, Delhi, India

Abstract
Purpose – The purpose of this paper is to understand the moderating influence of Multi-item List of
Value (MILOV) on credit card attributes, age, and gender in credit use among Indian customers. The
research examines the impact of “lifestyle” variables (convenience, use patterns, and status) on credit
card use.
Design/methodology/approach – Data were collected through mall intercept technique in six
metropolitan cities of India. A self-administered questionnaire was distributed to customers visiting
the malls.
Findings – Use and convenience emerged as the major determinants of credit card use among Indian
customers. Use, convenience, and status attributes were moderated by “sense of belonging” and “sense
of fulfilment” dimensions of MILOV. Young customers were likely to use credit cards.
Research limitations/implications – The study does not examine the influence of customer
income, occupation, and education on credit card use, as many customers were not willing to disclose
the information. These demographic factors can influence customers’ perception towards credit card
ownership and use.
Practical implications – The findings can be of immense use to international and Indian banks in
marketing of credit cards. The convenience attribute can be emphasized to instill confidence among
consumers and motivate them to use credit cards.
Originality/value – There is no previous research on Indian credit cards which examines the
influence of “lifestyle” and values on its use among Indian customers.
Keywords India, Consumer behaviour, Credit cards, Credit card use, Convenience, Status, Age,
Gender. MILOV
Paper type Research paper

1. Introduction
Credit card use represents a customer lifestyle and increase in the standard of living.
India is one of fastest growing economies in Asia; however credit card use remains
limited (The Times of India, 2010). The credit card market in India had witnessed a
Asia Pacific Journal of Marketing and steady growth in the late 1980s and early 1990s, but currently stands stagnant. Indian
Logistics banks like State Bank, Citi Bank, Axis Bank, Bank of Baroda, and HDFC offer credit
Vol. 24 No. 2, 2012
pp. 236-256 card services to their customers (Goyal, 2008). The growing income of the upper middle
q Emerald Group Publishing Limited class is an important driver of the credit card use. During the year 2007, credit card use
1355-5855
DOI 10.1108/13555851211218048 in the Asia Pacific region stood at $1.3 trillion, which was 30 percent of global credit
card transactions (KPMG, 2009). Japan led the region in total transactions made Credit card
through credit cards ($209 billion), followed by South Korea ($203 billion). The total use in India
transaction made through credit cards in India was merely $2 billion. Nearly 70 percent
transactions made through credit cards in India were for purchase of goods and
services. For credit card companies targeting the Indian market, understanding credit
card use patterns would be of great significance.
Mitchell and Mickel (1999) define credit cards as source of money which enables the 237
customer to make payments later. The advancement of technology has made credit
card a convenient mode of transaction (Phau and Woo, 2008). John Biggins, a consumer
credit specialist introduced the concept of credit card. The credit card was introduced
as a credit plan called “Charge-It” in the year 1946. This was in a form of scrip which
facilitated customers to make payments to the merchants or traders. After the
transaction, the scrip was deposited in the bank and the payments were advanced to
the trader (Gnanapushpam, 2007). The credit card serves the function of making
precautionary money easily available to customers for transactions, and since credit
cards have a “grace period”, customers’ can make the payment of the balance at the end
of the month (Brito and Hartley, 1995). It was just a matter of time before such credit
facility was made available to individuals through credit cards.
Chan (1997) states that growing income and changes in education system has led to
an increase in the credit card use in Hong Kong. Credit cards symbolize a lifestyle
(Bernthal et al., 2005) and convenience (Lee and Kwon, 2002). The popularity of credit
cards has risen because of the convenience of not having to carry cash. Credit card
research states that credit card ownership is dependent on increase in income (Canner
and Cyrnak, 1986; Delener and Katzenstein, 1994; Chan, 1997), and compulsive buying
behaviour (Roberts and Jones, 2001; Park and Burns, 2005; Norum, 2008; Phau and
Woo, 2008; Fogel and Scheider, 2011; Nga et al., 2011).
In India, credit card use has been slow to catch on as compared to other countries such
as China, Saudi Arabia, and Turkey. However, it is hoped that recent introduction of
security features in credit cards is likely to increase its use among Indians (The Times of
India, 2010). One of the major problems related to credit card use is that about 40 percent
people in India do not have a bank account. In the years 1987-2000, the Indian credit
market comprised of 3.8 million card holders with 25-30 percent growth rate
(Gnanapushpam, 2007). The Indian credit card market comprises of 18 banks and major
credit card providers are: Standard Chartered, HDFC, Axis Bank, State Bank of India,
Bank of Baroda, CitiBank, MasterCard, Barclays Bank, Deutsche Bank, Canara Bank,
and Diners’ Club. The credit card companies offer customized services in the form of
premium card, gold credit cards, cash back credit cards, silver credit cards, business
credit cards, airline credit cards, lifetime free credit cards, etc. (Economy Watch, 2010).
Several studies have examined usage patterns, age, gender and income influences
on credit card ownership, and relationship of attitudes towards money with use of
credit cards. However, there has been limited research to understand the influence of
lifestyle and values as moderators on credit card attributes and demographics. There
has been much research on credit card use and ownership in economies like China,
Hong Kong, South Korea, Sri Lanka, and Saudi Arabia. Credit card research in India is
limited and has focused on the influence of supplementary services on customers’
attitude towards credit card. There has been no research to understand the customers’
predisposition towards using credit cards regularly. India presents a huge untapped
APJML market for credit card companies. Developing economies have witnessed increased
consumer spending and growth in income levels but regular use of credit cards is
24,2 limited; especially in the Indian context. Understanding the lifestyle variables affecting
credit card can help companies in targeting decisions. China and India present a large
middle class that has been spending on services, real estate, and consumer durables.
The current research can provide valuable insights not only to credit card companies
238 but also to other companies targeting Indian middle class for making purchases
through credit cards. Gupta (2011) found that younger consumers in India are highly
materialistic. The lower income groups exhibited high materialistic traits than high
income group. The materialistic tendencies have an impact on Indian consumers’
buying behaviour and predisposition towards global brands. There has been much
research on Chinese credit card market (Sun and Wu, 2004; Willis and Worthington,
2006; Worthington et al., 2007) however, research on Indian credit card market is
limited. Further, increased use of credit cards could lead to increase in online shopping.
The findings related to understanding the lifestyle variables that influence credit card
use in India, can be of immense help to banks as well as organizations selling products
and services in the Indian market.

2. Literature review
2.1 Lifestyle and values
Lifestyle segmentation is a strategic approach for marketing of products and services.
The lifestyle concept relates to interests people have, how they spend their time and
resources, and views they hold about themselves and other people (Kucukemiroglu,
1999). Sjöberg and Engelberg (2005) suggest three different interpretation of the word
“lifestyle”:
(1) Lifestyle refers to the “value” person expresses related to dimensions like
freedom, justice, equality, etc.
(2) It refers to individuals’ attitudes, interests, opinions, and activities. This
approach can be used for classifying segments according to the above factors.
(3) It refers to “actual patterns” of usage of products and services.
Lifestyle is, therefore, different from personality. Lifestyle or psychographics give
insight about why certain brands are purchased, and differentiate users from non-users
(Sjöberg and Engelberg, 2005).
Values are beliefs that influence the motivation for desirable goals. Values “surpass
specific actions or situations, and act as guides for selection and evaluation of
behaviour, people, and events” (Smith and Schwartz, 1997). Values are organized
around attributes like need for warm relationships, security, excitement, fun, and
achievement (Kahle et al., 1986). Schwartz (1992) states that values are “beliefs, end
states of existence, it transcends certain situations, guides behaviour, and are
organized in a hierarchical order”. Rokeach (1973) posits that the immediate function of
values is to guide human behaviour in daily activities and therefore have a strong
motivational component. Values are abstract in nature whereas attitudes are organized
around certain beliefs and objects (McCarty and Shrum, 2000). Values become a part of
the individual’s value system and are prioritized with respect to other values. Values
help individuals in adjusting to social situations and resolving conflicts (Rokeach,
1973). Rokeach and Ball-Rokeach (1989) state that values differ across countries
and individuals can be compared not only on the basis of their values but also Credit card
value priorities. use in India
Kim (2005) states: “Values are general representations of the basic needs and goals
individuals use to guide beliefs about and evaluations of products”. Personal values
may be referred as motives (Pieters et al., 1995), cognitive evaluations (Kamakura and
Novak, 1992), “standards” that guide actions (Rokeach, 1973) and, directly influence
consumer behaviour (Koo et al., 2008). Within consumer behaviour research several 239
studies have examined the influence of social values on consumption of food items
(Goldsmith et al., 1997), involvement with fashion products (Goldsmith et al., 1993),
group affiliation (Rose et al., 1994), smoking (Kropp et al., 1999), wine consumption
(Orth and Kahle, 2008), consumption of orange juices (Grankvist et al., 2007), financial
services (Bloemer and Dekker, 2007), and relationship between personal values and
shopping orientation (Tai, 2008).
Research has examined role of personal values on customers’ product evaluations
and consumption decisions. Daghfous et al. (1999) state, that adoption of innovation
varies across individuals, and is influenced by personal values. Koo et al. (2008)
studied the influence of personal values on use of online shopping web sites. They
examined the influence of personal values on customers’ evaluation of online shopping
web sites, their benefits, attributes, and re-patronage motives. The results state that
“social affiliation” value relates to hedonic benefit and “self-actualization” to utilitarian
benefits consumers’ seek from online shopping web sites.
Bernthal et al. (2005) suggest that credit cards have the capacity to propel customers
towards a lifestyle. The credit cards convey certain values and lifestyle patterns about
the users. The study revealed that credit card use enable customers to attain desired
lifestyle. An individual’s controlled and uncontrolled use of credit card depends on
“internationalizing of ideologies of entitlement and frugality” (Bernthal et al., 2005). The
credit card use involves aspiring to become someone or adopting a certain lifestyle.

2.2 Research framework

There are several measures available to study influence of lifestyle and values on
consumer decision making (Drenth and Cornelisse-Koksma, 1970; Rokeach, 1973;
Vinson et al., 1977; Kahle, 1983; Mitchell, 1983; Schwartz and Bilsky, 1987; Homer and
Kahle, 1988; Herche, 1994; Allen and Ng, 1999; Amatulli and Guido, 2011). Rokeach’s
(1973) and Kahle et al.’s (1986) list of values (LOV) and human values by Schwartz and
Bilsky (1987) are most popular instruments used in marketing.
Rokeach (1973) had identified 18 terminal values (end states of existence) and 18
instrumental values (desirable mode of conduct). The Rokeach Value Survey (RVS)
measures individual’s values and the terminal and instrumental values are ranked in
order of importance. Kahle (1983) modified RVS and developed a different LOV. Kahle
(1983) modified the terminal values into smaller set of values which covered
individual’s roles and were person oriented (Beatty et al., 1985). The LOV scale includes
values like sense of belonging, excitement, fun and enjoyment in life, warm
relationships with others, self-fulfillment, being well-respected, sense of
accomplishment, security, and self respect.
Herche (1994) developed a multi-item scale for measuring social values. The 44 item
scale was an adaptation of the LOV scale. It includes dimensions of security, self respect,
being well-respected, self-fulfillment, sense of belonging, excitement, fun and enjoyment,
APJML warm relationship with others, and sense of accomplishment. The multi-item list of
24,2 value (MILOV) measures social values with respect to life goal view of values. For the
current research directed towards measuring customers’ credit card use, Herche’s (1994)
MILOV was adapted. Only four dimensions of MILOV scale were used for the research.
These dimensions were considered appropriate measures to explain Indian customers’
perceptions towards credit card use. The dimensions of security, being well-respected,
240 and sense of fulfillment were taken as they communicate individual’s values and may be
linked with adopting credit card for regular transaction. Sense of belonging dimension
was adopted as it reflects individual’s desire for social acceptance. Credit card use would
depend on the individual’s value to gain acceptance and social conformity. Fu and Wu
(2010) suggest that credit card use was dependent on cultural factors and is a case of
product internationalization.
Credit cards facilitate purchase of products/services without having funds available
at the time of purchase (White, 1975). Meidan and Davos (1994) in their research on
Greek credit card market found that credit card use depends on five factors:
convenience, indication of prestige, sense of security, economy, and shopping abroad.
They identified 15 items related to credit card use and these items were factor analyzed
to present the above mentioned five factors. The most important factor identified
was the “convenience attribute” of the credit card which accounted for 37 percent of
use. The convenience was related to extended credit facilities, and acceptance of credit
cards in different shopping outlets.
Maysami and Williams (2002) replicated the research of Meidan and Davos (1994) to
understand credit card use in Singapore. Their findings revealed similar credit card use
patterns as identified by Meidan and Davos (1994). Gan et al. (2006) suggest credit card
selection in Singapore was influenced by low interest rate and absence of annual fees.
In their later research, Gan et al. (2008) analyzed credit card usage pattern of
Singaporean customers. Their results indicated that credit card use was influenced by
income and gender. Other factors like “credit card leads to over-spending”, “savings as
payment source”, “unreasonable interest rates”, “credit card as status symbol” were
also identified.
Devlin et al. (2007) explored the underlying reasons for preference of two types of
credit cards: main card and subsidiary card among customers in Singapore. They
concluded that 85 percent of the customers preferred the main card due to favorable
discounts and promotions. The main card was used for a broad range of transactions
while the subsidiary card was used mostly as a stand-by. The customers identified
discounts as the main reason for credit card use (25 percent). They were able to buy
products and services from retailers at discounted prices, and this was a major motivator
for building loyalty for credit cards. The second most important reason (22 percent) for
using credit cards were the loyalty programs which gave special discounts to the card
holders. The next reason cited by customers was that they preferred to use the credit
card of the banks where they maintained savings account. The customers stated that
they believed that credit cards enabled them to plan and manage their expenditures.
Kaynak et al. (1995) in their study on credit card use in Turkey, found that the most
important reason for using credit cards was availability of emergency funds,
convenience during travel, and availability of cash for shopping. The factors indicated
that credit card in Turkey was primarily due to the convenience attribute. In a recent
study Akin et al. (2010) studied the benefits provided by Turkish banks and how they
differentiate their credit cards. They suggest that banks differentiate their credit cards Credit card
by offering card benefits such as travel miles, bonus points, rewards, shopping use in India
discounts, and facilitating payment in installments. Customers perceive credit cards
and other banking service as a bundle.
Chan (1997) examined the role of demographic and attitudinal factors in
determining credit card use in Hong Kong. Income emerged as a single most
important factor in determining credit card use in Hong Kong. The credit card use 241
could be increased by improving monetary incentives and financing convenience. Park
and Burns (2005) analyzed the role of fashion orientation as a direct predictor to
compulsive buying behaviour through credit card in South Korea. Customers more
conscious about latest fashions were likely to consider credit cards as fashionable and
trendy. The results indicate that fashion orientation affected compulsive buying
directly and credit card use indirectly. Abdul-Muhmin and Umar (2007) found that
Saudi Arabians had a positive attitude towards credit card usage and women were
more likely to own credit cards than men. Metwally (2003) studied credit card use in the
State of Qatar where customers were willing to use credit cards if it was accepted by
the local merchants. Abdul-Muhmin (2010) found that electronic payment modes were
acceptable by Saudis in low transaction purchase, while credit card payments were
preferred for high transaction value purchase.
Willis and Worthington (2006) suggest that credit cards communicate high “status
and value”. The Chinese customers give importance to the “status value” communicated
by the international credit cards. They recommended that the multinational companies
marketing credit cards in China should attempt to retain their international brand value,
so as to symbolize status (Willis and Worthington, 2006). Sun and Wu (2004) concluded
that credit card use in China differed across urban and rural regions, and China should
not be treated as a homogeneous market as economic development determined credit
card use. Worthington et al. (2007) conducted an exploratory research to understand the
credit card use among affluent urban Chinese customers. Their results suggest that this
segment primarily used credit cards for travel and entertainment. Worthington (2005)
states that structural, cultural, and historical factors restrict customers’ use of credit
card in China. Credit card use and petty installment in China was related to consumers’
attitude towards credit cards, money, and debt (Wang et al., 2011). Liu (2009) posit that
awareness of redemption reward points influenced consumers’ attitude towards
incentives and credit card use. Awareness about reward points could improve
consumers’ attitude and credit card use behaviour.
Roberts and Jones (2001) conducted research on money attitudes, credit card use,
and compulsive buying behaviour of American students. The findings show that
money attitude factors like power-prestige, distrust, and anxiety are positively related
to compulsive buying and credit card use moderates these factors. Rutherford and
DeVaney (2009) found that credit card users in the USA had college education, higher
incomes, and belonged to older age groups. The convenience users of credit card
believed using credit was bad, and had long financial planning horizons. Blankson
(2008) suggests that credit card use among US students was related to “purchasing
power, incentives, firm’s reputation, and good credit ratings”. Credit card use among
youth was related to high disposable income which accounted for compulsive buying
and money anxiety (Fogel and Scheider, 2011).
APJML Phau and Woo (2008) investigated money attitudes and credit card use among
24,2 Australian customers. Their findings revealed compulsive buyers perceived money as
a symbol of power and prestige. They were more likely to use credit cards as compared
to non-compulsive buyers. There was no difference between compulsive and
non-compulsive buyers with respect to time retention, anxiety, and distrust dimension
of money attitude scale. Foscht et al. (2010) explored the Austrian customers’ choice
242 and usage of credit cards versus debit cards. The customers’ choice of payment method
was determined by their personal characteristics, and features of the payment method.
Pulina (2010) studied the demographic, socio-economic, and banking specific factors
influencing credit card use in Italy. The results indicate that women preferred “classic
credit cards”, older customers (aged above 66 years) preferred “gold credit cards”,
customers aged 56-65 were likely to hold “classic credit card”, whereas younger
customers (18-25 years) preferred “revolving credit cards”.
Wickramasinghe and Gurugamage (2009) attempted to understand the credit card
use patterns in Sri Lanka. The findings suggest that credit card use was dependent on
debt ceiling, income, and marital status of the customers. Credit card use was popular
as customers could purchase routine items on credit; it symbolized status, and was
used for short term financing. The results are different from the credit card use in
developing countries which suggest that customers use credit cards for household
products, clothing, travel, and entertainment. The credit cards were often used for
paying for medical bills in Sri Lanka.
Amin (2008) conducted a research in Malaysia to study the acceptability of mobile
phone credit cards. The results indicate that perceived usefulness, perceived ease of use,
perceived credibility, and amount of information available were important determinants
in predicting Malaysian customers’ mobile credit use. Ahmed et al. (2010) studied the
impact of personal attributes on credit card use and customers’ attitudes towards credit
card debt. The results indicate that “lifestyle” influenced credit card use in Malaysia. The
attributes like self-esteem, time consciousness, peer group pressures, influence of
advertisement, and gregariousness were not important in influencing credit card use.
There was no significant impact of attitude on credit card debt, as credit card use had led
to compulsive buying in Malaysia (Ahmed et al., 2010). Nga et al. (2011) studied image
consciousness, materialism, and consumer spending on credit card usage in Malaysia.
Materialism emerged as a partial mediator in the relationship between image conscious
and compulsive spending of Malaysian consumers and their credit card use.
Goyal (2004) conducted a study on understanding the importance of availability of
supplementary services in determining pre-purchase decisions of credit cards of Indian
customers. Indian customers have a positive attitude towards supplementary services
offered along with credit cards like “ATM facility, acceptance of petrol pumps,
zero/limited lost card liability, acceptance at airlines and railway counters, and cash
withdrawal-within credit limit”. The study suggests that supplementary services can act
as positive tool in encouraging credit card use. Goyal (2008) examined the role of
supplementary services offered with credit cards in reducing perceived risk of customers.
She suggests that supplementary services can help in controlling psychological and
financial risks and influence customers’ credit card purchase decisions.
The discussions so far are summarized in Table I.
Customers across different cultures have different views about credit card use. The
acceptance of credit card depends not only on the psychographic or cultural factors,
 Credit card
Researchers Country Credit card: sought after factors
use in India
Meidan and Davos Greece Convenience, indication of prestige, sense of security, economy,
(1994) and shopping abroad. Convenience was cited as the most
important concern for using credit cards
Kaynak et al. (1995) Turkey Availability of emergency funds, convenience during travel, and
availability of cash for shopping 243
Akin et al. (2010) Turkey Customers consider the benefits offered by banks through credit
card as a “bundle” of services
Chan (1997) Hong Income was major determinant of credit card use
Kong
Maysami and Singapore Convenience was the major attribute for using credit card
Williams (2002)
Gan et al. (2006) Singapore Low interest rate and absence of annual fees
Gan et al. (2008) Singapore Age and gender affected credit card use. Other factors like status,
savings, credit card leads to over-spending were identified
Metwally (2003) State of Customers would use credit cards if it was accepted by local
Qatar merchants
Abdul-Muhmin and Saudi Credit card penetration was low; however people had a positive
Umar (2007) Arabia attitude towards credit cards
Park and Burns (2005) South Fashion orientation as a main predictor to credit card use, and
Korea affects compulsive buying behaviour
Devlin et al. (2007) Singapore Customers preferred to have two credit cards: main and
subsidiary. Main credit card was used for major purchase
decisions
Sun and Wu (2004) China Credit card use differed among rural and urban population
Worthington (2005) China Structural, cultural, and historical factors influenced credit card
use
Willis and China Status symbol
Worthington (2006)
Worthington et al. China Credit cards were used for travel and entertainment
(2007)
Phau and Woo (2008) Australia Power and prestige
Foscht et al. (2010) Italy Customers’ preference for credit or debit card was determined by
payment mode and personal characteristics
Wickramasinghe and Sri Lanka Status symbol
Gurugamage (2009)
Ahmed et al. (2010) Malaysia Lifestyle
Nga et al. (2011) Malaysia Materialism and compulsive buying behaviour and their influence
on credit card use Table I.
Goyal (2004, 2008) India Supplementary services promoted credit card use and could help Summary of main
in reducing risk perception of customers towards using credit research findings on
cards credit card use

but also on the economic factors. As economies develop, there is an increase in income
levels and changes in lifestyle coupled with improved (financial) infrastructure which
can be a major influencer towards credit card use.

3. Current research: methodology

To fill the gap identified above in the research on credit cards in India, the researcher
set out to examine the current situation in India with the help of the following research
questions:
APJML RQ1. Would frequency of credit card use depend on credit card attributes?
24,2 RQ2. Does customers’ age and gender influence credit card use?
RQ3. Do MILOV variables have a moderating influence on age, gender, and credit
card attributes in influencing credit card use?
Figure 1 shows the model which was tested regarding credit card use in India.
244
3.1 The survey instrument
The survey instrument contained measures of gender, age, and “I use credit card
regularly”. Four dimensions of MILOV scale viz. security, being well-respected,
self-fulfillment, sense of belonging were selected. The second part of the questionnaire
was adapted from Worthington et al. (2007) and some items were modified according to
Indian customers. The MILOV scale contained 17 items and there 18 items related to
credit card use. All responses were taken on five point Likert scale, with 5 for strongly
agree and 1 for strongly disagree.

3.2 Data collection

A self-administered questionnaire was administered through mall intercept survey
technique (Bush and Hair, 1985). The mall intercept method has the potential to provide
complete in-depth response. Data were collected in six cities of India: Gurgaon, Delhi,
Noida, Chennai, Lucknow, and Kolkata. These cities were selected so that a diverse
population could be accessed for sampling. The cities selected represented the
metropolitan cities of the country. The reason for selecting these cities was that income
levels are higher as compared to smaller cities and people are more likely to own credit
cards. A sample size of 100 from each city was desired. The respondents were credit card
users or those who had owned credit card but canceled it. Mall intercept technique has been
R2

Demographic
Factors:
Age
Gender
R1

Credit Card
Use Credit
Attributes
Card
Convenience Regularly
Use Pattern
Status
R3

MILOV
Security
Figure 1. Being Well-respected
Credit card use Self-fulfillment
research questions Sense of Belonging
used in other studies for collecting data (Pak and Pol, 1995; Griffin et al., 2000; Keng et al., Credit card
2007; Ahmed et al., 2010; Wang et al., 2010) and is considered free of bias. The respondents use in India
experience anonymity in mall intercept technique than in telephone or personal
interviews. Nine major malls located in the six cities were selected (three in each city). For
the final analysis a total sample was 565 could be used. Some of the questionnaires were
incomplete and had to be removed. The sample contained 68.5 percent males and
31.5 percent female respondents. The total percentage of 20-30 years respondents were 245
48.5 percent, 30-40 years 7.8 percent, 40-50 years 29.9 percent, and above 50 years
13.8 percent. Though mall intercept technique is a random sampling procedure, the
current research comprised of a large young population.

4. Analyses and findings

To ascertain the reliability of the MILOV dimensions, the Cronbach’s a values were
computed (Table II). Since MILOV scale was being used on Indian customers for the
first time, it was important to understand if the scale fitted the Indian settings. The
total items in the different dimensions of MILOV scale were 17.
Cronbach’s (1951) coefficient a measures the extent to which the scale items cohere
with each other. The Cronbach’s a for the four MILOV sub-scales ranged between
0.608 and 0.719 (Table II), showing that the scale was reliable. The a values for MILOV
sub-scales meet the Nunnally’s (1967) desired criteria of 0.5. Nunnally (1967) states that
scale item reliability values of 0.50 and 0.60 suffice in early stages of questionnaire
development, however, 0.70 is desirable. The MILOV scale had been developed for
Western customers and therefore gives low a value for Indian context.
Factor analysis is a multivariate statistical method for data reduction by observing
the nature of common factors that account for observed correlations (Fabrigar et al.,
1999). Although confirmatory and exploratory factor analyses (EFAs) techniques
measure the variance in the dataset, EFA is used for scale development or when there
is little theoretical basis for studying the variance (Hayton et al., 2004). In the current
research, EFA was used as there is no prior research on credit card use in India. EFA
test run on the 18 items examined the dimensionality of the scale to measure
customers’ attitude towards credit card use and construct a measurement model.
Fabrigar et al. (1999) state: “EFA is used when a researcher wishes to identify a set of
latent constructs underlying a battery of measured variables”. Table III represents the
results of the EFA. The analysis revealed three factors, which covered 58.27 percent of
variability. All items had factor loadings of more than 0.5 and met Nunnally’s (1967)
recommended level of internal consistency for scale development. No item was
excluded from the analysis. The results are shown in Table III.
Extraction method: principal component analysis:

MILOV Cronbach’s a

Security dimension 0.638 Table II.

Being well-respected 0.608 The reliability
Self-fulfillment 0.650 coefficients of the four
Sense of belonging 0.719 MILOV sub-scales
APJML
Factor
24,2 Variable Credit card items loadings

Variable 1: Use I prefer to use a credit card regularly 0.617

I occasionally use a credit card for only specific purchases 0.690
I use my credit card in emergency 0.583
246 I rarely like to use a credit card and prefer to make payment through 0.589
cash
I had a credit card but cancelled it 0.756
I am thinking of applying for a new credit card 0.543
I am planning to get a credit card within the next six months 0.663
Cronbach’s a 0.779
Variable 2: There are more advantages with credit card payments, than with cash 0.623
Convenience It is more convenient to use credit card payment, rather than cash 0.654
Using a credit card means that you do not have to worry about taking 0.668
too much cash with you
It is necessary to have a credit card with you when you travel overseas 0.622
It is safer to use credit cards payment compared to cash payment 0.665
Cronbach’s a 0.733
Variable 3: It is easier to control my expenditure when I use cash 0.616
Status The usage of a credit card would encourage people to buy things 0.549
beyond their budget
People come across difficulties frequently when they use credit cards 0.537
It is too complicated to use a credit card 0.582
The reason why most people adopt the credit card is that it makes 0.649
Table III. them feel cool and fashionable
Factor loadings for credit Paying by credit card makes people feel important and wealthy 0.627
card use factors Cronbach’s a 0.631

.
Factor 1: use.
.
Factor 2: convenience.
.
Factor 3: status.
The first factor was termed “use” comprised of items related to usage rate, it had seven
items. The second factor labeled as “convenience”, it had five items. The third factor
labeled “status” covered aspects like credit cards makes people feel wealthy; it had six
items. Table III shows the factor loadings and Cronbach’s a values. The Cronbach’s a for
variable 3 is 0.631, and is lower than other two variables. The factor
analysis results provided 18 items under three variables. None of the scale items were
removed.
4.1 Findings of the research
Correlation test administered to study to understand the relationship between the
credit card variables and the MILOV dimensions (Table IV).
The correlation test revealed that use variable of credit card use had a positive
relationship with MILOV dimensions of well-respected (r ¼ 0.160, p , 0.01) and
self-fulfillment (r ¼ 0.204, p , 0.01). The credit card convenience attribute had a
positive relationship with all MILOV dimensions. With security dimension (r ¼ 0.104,
p , 0.05), well-respected (r ¼ 0.139, p , 0.01), self-fulfillment (r ¼ 0.174, p , 0.010
and with sense of belonging (r ¼ 0.232, p , 0.01). The MILOV dimensions of being
 Credit card
Credit card Security Well-respected Self-fulfillment Sense of belonging
attributes dimension dimension dimension dimension use in India
Use variable 1 Pearson 20.067 20.160 * * 2 0.204 * * 0.073
correlation
Sig. (two- 0.114 0.000 * * 0.000 * * 0.082
tailed) 247
Convenience Pearson 0.104 * 0.139 * * 0.174 * * 0.232 * *
variable 2 correlation
Sig. (two-
tailed) 0.014 * 0.001 * * 0.000 * * 0.000 * *
Status Pearson 0.028 0.127 * * 0.134 * * 0.031
variable 3 correlation
Sig. (two- 0.509 0.002 * * 0.001 * * 0.469
tailed)
Table IV.
Notes: Correlation is significant at: *0.05 and * *0.01 levels (two-tailed); n ¼ 565 Correlation

well-respected and self-fulfillment have positive relationship with status variable

(r ¼ 0.127, p , 0.01 and r ¼ 0.134, p , 0.01).
To understand the moderating influence of MILOV, step-wise regression analysis
was run (Table V). For the first model, use emerged as the predictor variable for “use
credit card regularly” (R 2 ¼ 0.293, p , 0.01). The first model suggests that
convenience variable accounts for 29.3 percent of credit card use.
In the second model, use and convenience emerge as predictors (R 2 ¼ 0.394,
p , 0.01), and both these variables account for 39.4 percent of credit card use.
In the third model, age was introduced. Use, convenience, and age emerge as
predictors to credit card use and account for 41.4 percent of (R 2 ¼ 0.414, p , 0.01)
credit card use. The b value for age variable is negative which suggest that there is a
negative relationship between age of customers and their credit card use. The younger
customers are more likely to use credit cards than older customers. As the age
increases the credit card use decreases. The results are in line with research findings of
Gan et al. (2008), where they suggest that younger population use credit cards.
In the fourth model, gender was introduced. Use, convenience, age, and gender
influence credit card use and account for 42.1 percent of credit card use. The b values for
age and gender are negative, indicating that there is a negative relationship between
credit card use and gender and age. As age of customers’ increase, their credit card use
decreases. Similarly gender affects credit card use, wherein it appears that men in India
are more likely to own and use credit cards. In the fifth model, moderating influence was
studied. The sense of fulfillment dimension was introduced as the moderating variable.
Use, convenience, age, gender, and sense of fulfillment are important predictors to use of
credit cards (R 2 ¼ 0.427, p , 0.01 for use, convenience, age, and gender, and p , 0.05
for sense of fulfillment). The b values are negative for age and gender. The sense of
fulfillment moderates credit card use among Indian customers.
In the sixth model, sense of belonging is introduced. The results suggest that credit
card use depends on use, convenience, age, gender, sense of fulfillment, and sense of
belonging. These variables account for 43.3 percent of credit card use (R 2 ¼ 0.433,
p , 0.01 for use, convenience, and age, and sense of fulfillment, and p , 0.05 for
gender and sense of belonging). The adjusted R 2 value of 42.7 percent indicates that
APJML
Adjusted
24,2 Model Variable b R2 R2 Significance

1 First regression (dependent variable: Use credit 0.293 0.292

card regularly)
Variable 1 Use 0.541 * * 0.000 * *
248 2 Second regression (dependent variable: Use 0.394 0.392
credit card regularly)
Variable 1 Use 0.508 * * 0.000 * *
Variable 2 Convenience 0.319 * * 0.000 * *
3 Third regression (dependent variable: Use 0.414 0.411
credit card regularly)
Variable 1 Use 0.433 * * 0.000 * *
Variable 2 Convenience 0.363 * * 0.000 * *
Age 20.164 * * 0.000 * *
4 Fourth regression (dependent variable: Use 0.421 0.417
credit card regularly)
Variable 1 Use 0.434 * * 0.000 * *
Variable 2 Convenience 0.366 * * 0.000 * *
Age 20.170 * * 0.000 * *
Gender 20.088 * * 0.007 * *
5 Fifth regression (dependent variable: Use credit 0.427 0.422
card regularly)
Variable 1 Use 0.447 * * 0.000 * *
Variable 2 Convenience 0.353 * * 0.000 * *
Age 20.180 * * 0.000 * *
Gender 20.085 * * 0.009 * *
Self-fulfillment 0.077 * 0.023 *
6 Sixth regression (dependent variable: Use credit
card regularly)
Variable 1 Use 0.450 * * 0.433 0.427 0.000 * *
Variable 2 Convenience 0.372 * * 0.000 * *
Age 20.193 * * 0.000 * *
Gender 20.081 * 0.012 *
Self-fulfillment 0.096 * * 0.006 * *
Sense of belonging 20.084 * 0.013 *
Table V.
Step-wise regression Notes: Significant at: *0.05 and * *0.01 levels; n ¼ 565

a high model fit was achieved. The two MILOV dimensions moderate the use attribute
of credit cards, age, and gender. The results indicate that credit card use reflects a
lifestyle and self-fulfillment has a positive impact on credit card use. The main
predictor of credit card use was use (45 percent), convenience (37.2 percent), age
(19.3 percent), gender (8 percent), and MILOV values of self-fulfillment (9.6 percent) and
sense of belonging (8.4 percent) and moderate these factors. The increase in the value of
the use and convenience variable demonstrates the impact of lifestyle variable on credit
card use. The results are in tandem with other research that state that use and
convenience were important predictors in credit card use (Kaynak et al., 1995; Maysami
and Williams, 2002; Abdul-Muhmin and Umar, 2007; Ahmed et al., 2010; Foscht et al.,
2010). The moderating effect can be understood with respect to the impact MILOV
have on the credit card attributes and demographic variables of Indian customers.
The other two MILOV variables of “security” and “being well-respected” do not Credit card
influence the credit card use. The findings suggest that credit card use among Indian use in India
customers was not related to status or financial security aspects of lifestyle.

5. Discussion
The present study has considered the lifestyle and values as predictors to credit cards
use in India. The Indian credit card market is projected to grow in the coming years 249
and the findings can be helpful to credit card companies in targeting customers. The
previous study on Indian credit card market has focused on the supplementary
services in changing customers’ attitude towards credit card. Credit card use is still
limited as most Indians prefer to make payments through cash and believe that credit
cards may not be a secure mode of transaction. The present study focused on credit
card use attitude of customers. The findings reveal the following:
.
Use was a major determinant in credit card use. However, credit card use in India
is restricted to limited use. The items in the use category show that most Indians
do not use it regularly. Companies can focus on marketing the credit cards by
focusing on its use related benefits. The results may be interpreted in the light
that there is lack of trust regarding credit card use.
.
Convenience: credit cards were considered convenient in financial transactions.
The “convenience” attribute can increase the use and adoption of credit cards.
.
Age: the credit card use is influenced by the age of the customers. Younger
people are more likely to use credit cards while older people are comfortable with
cash payment methods. For the younger generation credit card use relates to a
“lifestyle” and enables them to improve “sense of fulfillment”. Credit card
companies should target the younger generation as the credit card communicates
a lifestyle to them.
.
Gender: in India gender differences exist related to credit card use. Men are more
likely to have credit cards than women. This is because women are still in most
cases financially dependent on their families. Credit card ownership is with men
and it is used for shopping for the family.
.
Sense of belonging: this has a negative impact on the perception towards credit
cards. In India, most transactions with the local retailer are on credit, and people
make payments later on. The credit facilities are extended because the retailer
knows the customers and shares a personal relationship with them. Credit card
use is perceived to have a negative impact on people’s sense of belonging.
. Sense of fulfillment: had a positive impact on credit card use. People feel that
possessing credit cards adds to their sense of achievement and accomplishment.
It connotes a feeling of fulfillment and symbolizes having accomplished
important things and position in life.
The use and convenience attribute emerged as the main predictor of credit card use,
and sense of fulfillment and sense of belonging moderate the age, gender, and credit
card factors. One major implication is related to “use attribute”. Indian customers’ have
inhibitions about using credit card as they may fear that owning credit cards is costly.
The concerns may be related procedural delays if the credit card gets lost, harassment
from the administrative authorities, and difficulty in getting credit card. The findings
APJML are similar to other studies which state that credit card use is depends on the
24,2 perception of convenience (Meidan and Davos, 1994; Kaynak et al., 1995; Maysami and
Williams, 2002), age, and gender of the customer (Slocum and Matthews, 1970;
Abdul-Muhmin and Umar, 2007; Gan et al., 2008; Wickramasinghe and Gurugamage,
2009). The sense of fulfillment dimension increases the propensity of customers to use
credit card. This is an important finding, because India has one of the largest markets
250 in the world with a high percentage of young customers. The increase in income is
likely to affect the customer lifestyle and their desire for “better things”. Credit card
symbolizes global reach (people can buy things they want online and have them
shipped to India), comfortable lifestyle, and a sense of achievement. These factors can
help in improving credit card use. The credit card companies can use themes of “good
quality life” to promote credit card use. The Indian customer does not relate credit card
use with “status”, as is the case with Chinese (Willis and Worthington, 2006;
Worthington et al., 2007;) and Australian customers (Phau and Woo, 2008).
One important deterrent is that local traders do not have the infrastructure for
accepting credit card. Indians get credit facilities from their local retailers on their
purchases, this diffuses their desire to avail credit card, as the benefits are the same.
Local retailers are willing to extend credit facilities over months to their customers,
which makes payment easy. The credit card research in other economies posits that
credit card use is related to convenience, acceptance of credit card at local stores, and
status symbol.

6. Conclusion
The relevance of the findings of this research for practitioners and researchers cannot
be emphasized enough. The lifestyle dimensions examined in this research can help
credit card companies in profiling the Indian customer market. The sample comprised
of customers from different regions of India. The Indian customers’ risk and utility
perceptions towards owning credit cards should be addressed while designing
marketing strategies. Lifestyle appears to play an important role in credit card
ownership. Since income levels have improved in the past few years, lifestyle
marketing of credit cards can help in positioning and segmenting strategies. At the
global level India presents an attractive market with a large middle class, dual income
households, and a large population which is between age groups 30 and 45 years.
These demographic and psychographic factors can play an important role in
marketing of credit cards. Multinationals and Indian banks can link credit card use
with lifestyle and convenience and this can help them in strategically marketing credit
cards. The results indicate that Indians perceive credit card use to be related to sense of
fulfillment and this dimension can be used for credit card advertising. Themes
portraying accomplishment and fulfillment can be used to market credit cards. Banks
need to explain to the customers about the benefits of using credit cards. Most Indians,
lack knowledge about credit card and are afraid to use it. These fears should be tackled
by counseling customers and informing them about the benefits of credit cards.

7. Future research
The future research can be directed to understand the implications of collectivist
factors on credit card use. The susceptibility to interpersonal relationships can be
studied to understand its influence on Indian customers credit card use. Credit card use
would depend on social influence and individual’s desire for group conformity. These Credit card
factors may also reduce the customers’ perception of risk and increase their use in India
acceptability of credit cards. The financial risks in transaction act as a major deterrent
in credit card usage. Therefore, trust/security related perceptions can be examined
with respect to credit card use. The trust and risk attitudes of Indian customers can be
explored with reference to multinational and national credit card companies and banks.
The income and education variables may be also considered to understand their 251
influence on credit card behaviour. Influence of materialist values and money attitudes
can be studied to predict credit card use. Further analysis can be done to identify the
purchases customers’ make through credit cards (products and services).

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About the authors

Arpita Khare is currently Faculty at Indian Institute of Management-Rohtak, India. She has a
MBA degree in Marketing and a DPhil in International Management from the University of
Allahabad. Her research interests span consumer behavior, retailing, services marketing and
supply chain management and she has authored several research papers in International
APJML and national journals. Arpita Khare is the corresponding author and can be contacted at: khare.
arpita@gmail.com
24,2 Dr Anshuman Khare is a Professor in Operations Management at Athabasca University,
Canada and an Alexander von Humboldt Fellow. His research focuses on environmental
regulation impacts on the automobile industry and its supply chain. He is also a former
Monbusho Scholar, having completed a Post-doc assignment at Ryukoku University in Kyoto,
Japan. He has published five books and over 125 research papers and articles, and is listed as an
256 Academic Expert in the areas of operations management, environmental strategy, sustainable
development, environmental manufacturing, and responsible manufacturing on Environment
Canada’s Academic Expertise Database. He has published on a wide range of topics including
JIT, supply chain management, sustainable development related to public policies, regulations
and strategic developments due to climate change regulations and initiatives, ecopreneurship,
sustainable cities and impact of environmental/climate change regulations on technology,
innovation and corporate strategy.
Dr Shveta Singh has more than eight years of academic and industrial experience behind her.
An Assistant Professor with IIT-Delhi, she teaches courses on Finance to the students of the
Master’s in Business Administration and the Bachelors in Technology in Information
Technology program. Her current research interest areas are financial services in India, security
analysis and corporate finance.

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