Credit Card Usage And Current Age Finance Essay

ukessays.com/essays/finance/credit-card-usage-and-current-age-finance-essay.php
Current research was conducted to check the impact of credit card usage on consumers expenditures
patterns. This chapter of data analysis deals with the detailed analysis and discussion on the data. The
researcher has applied vaious satistical tests namely; chi- square and frequencies for analysing the
data.. The purpose of the study was to determine the influence of demographic variables like age,
gender and income level on expenditure patterns made through credit cards and to determine the
influence of inflation and interest rate on expenditures made through credit cards.
4.1 Hypothesis testing
4.1.1 Hypothesis # 1 Credit card usage and current age
Ho; Credit card usage is not affected by age.
HA; Credit card usage is affected by age.
On the basis of analysis, researcher concludes that the credit card usage is definitely affected by age
group, different age group have different frequencies of charging credit cards or making purchase on
credits. Age group of 31-40 usually uses credit card 5 to 10 times in a month. 51 percent of credit card
users fall in this category, while age group of 21-30 consists of 40 percent of credit card usage. If
Pearson Chi-Square value is less than 0.05, null hypothesis is rejected and above table shows the
significant value is .000, so researcher can easily reject the null hypothesis and can conclude that
credit card usage is affected by age.
4.1.2 Hypothesis # 2 Credit card usage and gender
Ho; Credit card usage is not affected by gender.
HA; Credit card usage is affected by gender.
On the sources of above table, researcher can wrap up that frequency of using credit card is not
affected by gender and both male and female some how using equal times credit card in a month. If
Pearson Chi-Square value is greater than 0.05, null hypothesis is accepted, so the researcher
accepted the null hypothesis and concludes that credit card usage is not affected by gender. Analysis
also concludes that 76 percent of credit card users are male while female category only consists of 24
percent.
4.1.3 Hypothesis # 3 Credit card usage and income level
Ho; Credit card usage is not affected by income level.
HA; Credit card usage is affected by income level.
On the base of above Chi-Square table, researcher be able to reject the null hypothesis and can bring
to a close that credit card usage is affected by income level of individuals. Less income groups uses
less credit card in a month as compared to higher income levels. 32 percent of credit card using
frequency falls in the income level group of 30 to 40 thousand. While individuals have income more
than 50 thousand comprises of 23 percent. If Pearson Chi-Square value is less than 0.05, null
hypothesis is rejected, and researcher concludes that credit card usage is affected by income level of
individuals.
4.2 Frequency Distribution
4.2.1 High inflation
On the basis of study, researcher wrap up that making purchase on credit to the vary extend is not
affected inflation, most of individuals belives that they will almost use same amount of money from
credit cards if the inflation rises. While some thinks that they have to pay more amount of same quantity
so they will decrease that usage of credit card because at the end they might be paying higher interest
on their credits and rest thinks that they will be using or paying higher amount of same purchases so
definitely their amount of credit will increase.
4.2.2 High Interest rate
The above shows that making purchase on credit is highly affected by interest rate, majority of credit
card user belive that they will limit their purchase if interest rate increases because they have to pay
more amount of interest on the same amount of purchase. While only nine percent of individuals thinks
that their purchases will not be affected by interest rate because they have the ability to pay the due
amount in time.
4.2.3 Expenditures affected by inflation
On the basis of above table researcher concludes that 56 percent of individuals believe that inflation
will not affect their retail store purchasing, while 44 percent thinks that inflation will affect their retail
store purchasing and they will limit their retail store purchases if inflation increases.
The given table shows that almost all of the individuals believe that inflation will not affect their furniture
purchase through credit card because furniture is not purchase frequently.
On the basis of study researcher concludes that more or less all of the individuals believe that inflation
will not affect their jewelry purchase through credit card because jewelry is not purchase frequently as
well.
On the basis of analysis researcher concludes that 46 percent individuals believe that their clothing will
affect by high inflation because they have to pay higher prices on other purchases.
On the basis of above table researcher concludes that 49 percent individuals believe that dine out will
affect by high inflation because they have to pay higher prices on other purchases.
The above table shows that approximately all of the individuals believe that inflation will not affect their
payments of utility bills through credit card.
On the basis of analysis researcher concludes that almost all of the individuals believe that inflation will
not affect their air traveling through credit card.
On the basis of above table researcher concludes that 64 percent individuals believe that their fuel will
not affect by high inflation because fuel is necessitate for them.
On the basis of analysis researcher concludes that about all of the individuals believe that inflation will
not affect their electronic items purchases through credit card because these purchases are not made
every month.
On the basis of above table researcher concludes that all of the individuals believe that inflation will not
affect their education whether they are paying through credit card.
4.2.4 Expenditures affected by interest rate
In the table above researcher concludes that 67 percent individuals believe that their retail store
shopping will affect by high interest rate because they have to pay higher amount of interest on the
same amount of purchases.
On the basis of analysis researcher concludes that almost all of the individuals believe that interest rate
will affect their furniture purchase through credit card.
On the basis of above chart researcher concludes that almost all of the individuals believe that interest
rate will affect their jewelry purchase through credit card.
In the above table researcher concludes that more than half percent individuals believe that their
clothing will affect by high interest rate because they have to pay higher amount of interest on the same
amount of clothes purchased.
On the basis of analysis researcher concludes that 58 percent individuals believe that dine out will
affect by high interest rate because they have to pay higher amount of interest on the same amount of
food that they dine out.
On the basis of above chart researcher concludes that 68 percent individuals believe that their payment
of utility bills through credit card will not be affect by high interest rate because they might have the
ability to pay credits before its sue.
On the basis of analysis researcher concludes that almost all of the individuals believe that interest rate
will affect their air traveling through credit card.
In the above chart researcher concludes that more than half percent individuals believe that their fuel
purchasing will affect by high interest rate because they have to pay higher amount of interest on the
same amount of fuel purchase.
On the basis of analysis researcher concludes that roughly all of the individuals think that interest rate
will affect their electronic item purchases through credit card.
On the basis of analysis researcher concludes that approximately all of the individuals consider that
interest rate will affect their education through credit card.
4.2.5 Expenditures made through credit cards
On the basis of analysis done, researcher concludes that 75 percent of credit card user uses their
credit card on retail stores and 62 percent credit card users refill fuel on credit. 61 percent of credit card
users facilitate their dine out through credit cards and around 54 percent use credit card on clothing as
well. Other than that only 37 percent of credit card users pay utility bills on credit and rest with very
small percentages on other expenditures through credit card like air traveling, electronic goods,
education, jewelry and furniture because these are the expenditures that are not made on frequent
basis in a month.
4.2.6 Average amount spend on these expenditure patterns
On the basis of analysis researcher concludes that around 62 percent of credit card users who spend
on retail store made expenditure of amounting rupees 5000 to 8000 average and approximately 24
percent spend average amount 2000 to 5000.
On the basis of chart researcher concludes that only 2 percent of credit card users spend on furniture
and their average expenditure is amounting 11000 to 15000.
On the basis of analysis researcher concludes that 50 percent of credit card users who spend on
jewelry through credit card, spend average 8000 to 11000.
On the basis of above table researcher concludes that out of 54 percent of credit card users who uses
credit card to facilitate their clothing needs around 61 percent spend average 2000 to 5000 monthly on
clothing.
On the basis of analysis researcher concludes that out of 61 of credit card users who spend on dine out
approximately 50 percent spend average 2000 to 5000 monthly.
In the above chart, researcher concludes that only 34 percent of credit card users facilitate their utility
bills through credit card and between those 34 percent users around 55 percent spend average 5000 to
8000 monthly.
On the basis of analysis researcher concludes that a credit card holder spend about more than fifteen
thousand on air traveling.
In the above table, researcher concludes that out of 62 percent of credit card holders who refill fuel
from credit card approximately 62 percent spend average 2000 to 5000 monthly on fuel.
On the basis of analysis researcher concludes that only 3 percent of credit card holders spend average
8000 to 15000 on electronic goods.
On the basis of analysis researcher concludes that out of 11 credit card users 50 percent of them spend
average 5000 to 8000 on education in a month.
4.3 Discussion
In this research three hypotheses are assume, first is credit card usage is not affected by age. Second
is credit card usage is not affected by gender and the last one is credit card usage is not affected by
income level of the individuals. By testing these hypotheses, researcher concludes that age and
income level of individuals affect the credit card usage but credit card usage is not affected by gender
both male and female has same frequencies of using credit card. Both male and female card users
have positive attitude towards credit card and indicate credit card as a convenience and satisfactory
substitute of cash (Joseph T. Plummer in 1971). When talking about the income level, credit card usage
is definitely affect income because higher income groups use credit card more as compared to lower
income groups. Upper class uses credit card for convenience purpose as compared to lower class (H.
Lee Mathews and John W. Slocum, Jr. in 1969). Credit card usage is also affected by age in the sense
that old age people tend to use less credit card as compared to young age groups. The results indicate
that younger people tend to use credit card more frequently as compared to old age persons (Kenneth
J. Whit, in 1975).
In the analysis different frequencies are taken, such as credit card usage with respect to inflation and
interest, expenditures facilitate by credit cards, average amount spend of each expenditure and last but
not the least expenditures affected by inflation and interest rate. More than half of credit card users
anticipated that their credit card usage in term of amount would be same if inflation rises, they limit their
one of the expenditure for the sake of other where they are paying extra amount or higher prices. When
taking higher interest rate in account almost all the credit card users believe that they would limit their
credit card usage because they might have to pay higher interest on same amount of purchase. Many
of the credit card users believe that their retail store purchasing, clothing needs, dine out, utility bills
payment and refilling fuel would not be affected by inflation because these are some expenditures that
have to make even if prices increases and almost all the credit card users believe that their almost all
expenditures are affected by higher interest rate because in case of carrying over the balance amount
in the next month they would have to pay higher interest.
Expenditures that are frequently made through credit cards are retail store purchasing, clothing; dine
out, utility bills and fuel. Almost 75 percent of credit card users facilitate their retail store purchasing
through credit card, 62 percent of credit card users refill fuel on credit and almost half of credit card
users but clothing and do dine out on credits. Other expenditures are not made on frequent basis and
thats why their percent is quite low. While talking about the average amount spends on these
expenditures that are made on frequent basis, retail store average amount is 5000 to 8000 per month
and same is the amount of utility bills, where other expenditures like clothing, dine out and fuel average
amount spend on these expenditures is 2000 to 5000.
Share This Essay
To share this essay on Reddit, Facebook, Twitter, or Google+ just click on the buttons below:
Request Removal
If you are the original writer of this essay and no longer wish to have the essay published on the UK
Essays website then please click on the link below to request removal:
Request the removal of this essay.
More from UK Essays