The relationship between credit card attributes and the demographic characteristics of card users in China

Abstract

Purpose The purpose of this paper is to investigate the impact that several of these factors have on a consumer’s decision to hold a credit card, as well as those involved in determining the level of credit card limit. Design/methodology/approach Potential explanatory variables were identified in the literature, then used to build a binary logit model to test the impact of the card and consumer characteristics on credit card ownership. Data were collected via a structured interview of 409 consumers living in Hebei Province, China. Findings The results indicate that convenience in use, level of credit card interest rates, the application process, number of people in the household, a rewards programme, marital status, credit limit and age influence the likelihood of the respondent holding a credit card. Further, an anaylsis shows that the number of credit cards held, duration of holding a credit card, monthly credit card purchasing volume and having a degree at the tertiary level, are significantly and positively related to different levels of credit limit. Originality/value In summary, in order to attract more consumers to credit card use, the banks and credit card companies should consider making it more convenient for consumers to use their credit cards. Moreover, banks can increase their networking and degree of cooperation with merchants to increase the acceptance of payment by credit card. The most heavily used businesses such as supermarkets and smaller retailers, where consumers purchase goods frequently, would be good targets for banks’ attention. In addition, banks might also improve credit card reward programmes to make these more efficient and perhaps increase the size of the rewards customers can earn through card use.

Micro Retail Enterprises in China: Challenging the Stereotype

“…In other words, people with higher incomes are more likely to have lower credit card debt because they are presumably better able to pay off their credit card debt on time. The convenience of credit cards and the rise of rewards and loyalty programs serve as significant factors influencing consumers' decision whether to hold a credit card (Gan et al, 2016). The authors were surprised at the high rate of bank card acceptance by MREs given that the figures were quite low just a few years ago.…”

Key Factors Determining the Expected Benefit of Customers When Using Bank Cards: An Analysis on Millennials and Generation Z in Romania

“…In China, one of the largest markets in terms of the potential for the development of banking products and services, the results obtained by Reference [43] show that having a credit card is influenced by several factors, such as the level of interest rate associated with the card, the card approval process, the number of persons in the household, the size of the credit limit, the rewards programs. Moreover, research has shown that the level of education influences the size of the credit limit that customers can obtain from banks.…”

“…Moreover, Reference [26] showed that the decision to purchase a bank card is influenced by specific factors for young students compared to other categories of age. Rewards programs are also addressed by Reference [43], who shows that the increase in the use of bank cards is directly related to the rewards offered to cardholders. Regarding the preference for cash or card payments [50], it shows that young people with above-average income prefer to make card payments; the demographic effects on the use of the cards vary according to regions, types of housing and status within the family.…”

Marketing bank services to youth in China

“…With rapid economic growth, increased household income and exposure to international consumer culture, consumers in modern China are moving from saving to spending (Gan et al, 2016). Despite the recent economic slowdown, China's private consumption of cars, consumer electronics, e-commerce and overseas travel registered two-digit growth in the past few years (The Economist, 2016).…”

“…Thus, college students and young people represent a promising target market of the banking industry (Almossawi, 2001). This youth market segment tends to be creative, adventurous and curious to try out new things (Gan et al, 2016). Young consumers in China are paying increasing attention to material possessions, engaging in social comparison of possessions and valuing possessions as being essential for personal success (Chan and Zhang, 2007).…”