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POPULARITY OF CREDIT CARDS ISSUED BY DIFFERENT BANKS

BUSINESS STUDIES PROJECT

9/18/2010

MOHAMMED ERFADH EBRAHIM
XI - B
TO
Mrs. Amala Anie Mohammed
Business studies teacher


2
CONTENTS
S.no Topic Page no.
1 Acknowledgement 3
2 List of tables 4
3 List of figures 5
4 Introduction 6
5 Objective 7
6 Material and method 8
7 Background information
Credit cards
9
What are the uses of a Credit card 10
What are the other benefit of a credit card 11
Cost of having a credit card 12
8 Banks that provide Credit card facility in Bahrain 14
Bmi Bank B.s.c. (c) 15
Hsbc Bank Middle East Limited 17
Citibank 19
Ahli United Bank B.s.c. 21
Citibank 22
9 Analysis 23

10
Conclusion 34
11 Appendix 35
12 Bibliography 38

3
ACKNOWLEDGEMENT

First and foremost I thank the god for his blessings, showered on me in
completing the project successfully.
I whole heartedly thank our respected chairman MR.SHAKIL AHMED AZMI,
who helped me in all endeavors and for their blessings to make this project a successful
one.
I am extremely grateful to Our Principal Dr. MOHD TAYYAB for the keen
interest and affection and to provide necessary and essential facilities to do this project
report.
I convey my sincere thanks and deep sense of gratitude to our Head teacher Mrs.
NAJIAH AHMED, for offering me an opportunity to do the project.
I take the privilege to extend my hearty thanks to our teacher
Mrs. AMALA ANNIE MOHAMMED, Department of Business Studies, for her
encouragement, support, valuable suggestion and guidance throughout the project
I am grateful to all my friends for their guidance and inspiration extended all
along the project.
Finally, I express my sincere thanks and deep sense of gratitude to my parents and
family who supported and helped me in completion of this project.

4
LIST OF TABLES
S.no Table name


Page no.
1 Age of respondents 23
2 No. of credit cards 24
3 Banks that issued credit cards 25
4 Type of credit cards 26
5 Credit card companies 27
6 Factors that influenced you to buy credit cards 28
7 Are the services provided by credit cards satisfying 29
8 Is interest rate reasonable 30
9 Is there any increase in your expenditure after taking credit cards 31
10 Do you feel taking credit card was a good decision 32
11 Would you like to switch over to another companys cards 33
LIST OF TABLES

5

S.no Figure name Page no.
1 Age of respondents 23
2 No. of credit cards 24
3 Banks that issued credit cards 25
4 Type of credit cards 26
5 Credit card companies 27
6 Factors that influenced you to buy credit cards 28
7 Are the services provided by credit cards satisfying 29
8 Is interest rate reasonable 30
9 Is there any increase in your expenditure after taking credit cards 31
10 Do you feel taking credit card was a good decision 32
11 Would you like to switch over to another companys cards 33


INTRODUCTION

A credit card is a payment card that involves a line of credit

6
that is issued to the cardholder. A cardholder is provided with
the ability to pay a merchant (goods and services providers)
if cash is unavailable. The amount of the purchase becomes
the cardholders debt to the credit card issuer.

This project deals with the popularity of credit cards issued by
different Banks in Bahrain. To find out the most popular credit card
a survey was conducted with the help of a questionnaire among 25
samples in different parts of Bahrain

Consumers are fickle so a list of "most popular credit cards" would
change daily. Also, keep in mind, whatever one might need or want
in a credit card may not be the same as what someone else needs.


OBJECTIVE

The objectives are as follows:-

To find out the most popular credit card in Bahrain.
To find out which Bank issued that credit card.
To find out which companys credit card is mostly used.
To find out the average age of credit card users.

7
To find out peoples response towards other factors regarding credit cards.







MATERIAL AND METHODS



Research Design : Survey method was used with a structured type
questionnaire as the data-collecting instrument.

Sampling Procedure: The sample for the study was selected from Bahrain. Selective
sampling was chosen based on the usage of credit cards.

Data collection: In total 25 samples were surveyed with the help of the questionnaire.

Analysis of Data: Different methods of analyzing were adopted such as :-
Coding and tabulating
Averages
Presentation


8
CREDIT CARDS

A credit card allows a person to buy goods and services on
credit, even though they might not have the money to pay for
it right away. The debt a cardholder is allowed to run up is
subject to a set credit limit agreed to between the cardholder
and the card issuer. The card issuer generally determines the
credit limit and looks at salary and previous credit rating to
decide on how much credit to give.
Credit card users are billed on a monthly basis and are
expected to pay at least the minimum payment. Any unpaid
balances will be subject to interest charges. Purchases with credit
cards are just like purchases with cash, except that with credit
cards payment can be delayed for a short time.






WHAT ARE THE USES OF A CREDIT CARD?

A credit card transaction can be processed by merchants in
all outlets that support the card type. Card networks (Visa,
MasterCard, AMEX etc.) are accepted worldwide and allow a
cardholder to purchase goods directly; card issuers will charge

9
the cardholders account for the amount spent and any
finance charges, when applicable.

Credit cards can be used online (on the Internet), to withdraw
cash from a bank or ATM and can also be used overseas.
Having a credit card can be a very practical solution instead
of carrying large amounts of cash when travelling. If using the
card overseas, foreign exchange charges and transaction
charges may also be charged.






WHAT ARE THE OTHER BENEFITS OF A CREDIT CARD?

It is much safer to use a credit card than to carry large
amounts of cash. If cash is lost, it usually cannot be
recovered.
If a credit card is lost, the credit card company can cancel it.
Cardholders will need to notify their credit card company
immediately as some cards will continue to charge for
purchases until they receive notification that the card is lost
or stolen. It is advisable to take precautions, such as having
the card insured against theft and fraudulent use.

10
Some cards come with additional services such as medical
cover for international holidays, purchase protection and a
variety of promotional offers.

Credit cards are convenient; they can be used to make hotel,
car and other reservations, and can be accepted over the
phone and online over the Internet. Credit cards can be used
for emergency payments should sufficient cash not be
immediately available.

COSTS OF HAVING A CREDIT CARD:

All credit cards charge interest on any unpaid balance each
month. If you carry forward an unpaid balance from the
previous month and continue using (charging) your credit
card, you will pay interest on all the new purchases made as
well as the balance you carried over from the previous month.
If you do not pay down your credit card balances on a regular
basis, your debt to the credit card company will rise quickly
and managing your debt might become difficult.

The interest charges on credit cards are usually much higher
than on normal bank loans. As a result, credit cards are not
a good way of financing purchases over a long period of time.
If you let your unpaid credit card balance increase, you run
the risk of paying almost all of your monthly minimum

11
payment as interest charges.

Credit cards with no grace period start charging interest as
soon as a purchase is made. Making large purchases and
paying off small amounts of the outstanding balance will
make purchases more expensive.

Unnecessary costs, such as late payment fees, over the limit
fees and penalty rates can greatly increase your outstanding
balance.

Misusing a credit card (for example, running up a high credit
card debt and then being unable to pay it off) can ruin your
credit record and make it difficult to finance other purchases,
or get a loan.










BANKS THAT PROVIDE CREDIT CARD FACILITIES IN BAHRAIN:

12

Almost all the banks in Bahrain provide credit card facility. From those, details about
some of the popular Banks are provided below:

i. Bmi Bank B.s.c. (c)
ii. Hsbc Bank Middle East Limited
iii. CrediMax(BBK)
iv. Ahli United Bank B.s.c.
v. Citibank







Bmi Bank B.s.c. (c)

Bahraini retail and commercial banking institution, BMI Bank (BMI) is a retail bank,
registered in Bahrain and regulated by the Central Bank of Bahrain offering a full range
of retail and commercial banking services. BMI operates in Bahrain through a network
of 8 branches and 25 ATMs with net banking for easy access to services. The online

13
platforms offered by BMI were awarded the prestigious Bahrain e-Content Award 2009
in the e-Banking category, recognizing ease of use of its comprehensive e-banking
services in a safe and secure environment in which to conduct personal and business
transactions.
BMI also operates an Offshore Bank in the Seychelles, a branch in Qatar and has a
21.33% shareholding in Gulf African Bank in Kenya. BMI owns the Diners Club
Services Bahrain W.L.L and operates the Diners Club cards franchise in Bahrain.
BMIs shareholders include some of the strongest and most respected financial
institutions across the GCC, including BankMuscat. BMI, rated as Investment Grade,
maintains total equity (share capital and reserves) of USD 341 million.

Types of credit cards provide by bmi:
The BMI Visa Classic and Gold Credit Cards
La Carte Classic and Platinum credit cards
Diners Club Card

Features:
Interest: 1.6% 1.5% (gold)
Minimum Payments: 5% of outstanding

14
Annual Charges: None

Hsbc Bank Middle East Limited
In Bahrain, the HSBC Group is represented by HSBC Bank Middle East Limited, the
largest and most widely represented international Bank in the Middle East.
A principal member of the HSBC Group since 1959, the Bank's unique relationship
with the Middle East dates back more than a century. Founded in London in 1889, it
pioneered banking in the region and for decades was the only bank committed to
supporting the area.
Today HSBC provides a wide range of banking services for both corporate and
individual customers.
HSBC in Bahrain offers you a full range of Personal Financial Services such as Current
and Savings Accounts, Time Deposits, packaged financial products like HSBC Premier
and STATUS, Credit Cards, Personal Loans, Auto Loans and Home Loans. You can
access our products and services through a range of state-of-the-art delivery channels
such as our Phone Banking services, Personal Internet Banking services, our Branch
Network as well as through our network of ATMs conveniently situated around
Bahrain.

Types of credit cards provide by HSBC:

15
Classic Credit Cards
Premier Credit Cards
Gold Credit Cards
Advance platinum Credit Card

Features:
Interest: 1.75 2.25% (depending on card, 4 types offered)
Minimum Payments: 5% or 10 B.D. (whichever higher)
Annual Charges: 20 B.D. (classic) 30 B.D. (gold)
(BBK)

Being the first credit card issuer in the Kingdom of Bahrain, CrediMax evolved to be a
pioneering market leader in credit issuing and acquiring since issuing the first credit
card in July 1991 as card centre at Bank of Bahrain and Kuwait, one of the largest
commercial banks in the Kingdom.

Previously, CrediMax was simply a card centre within the Retail Division of Bank of
Bahrain and Kuwait. In April 1999,the card centre was spin off into a separate and
independent fully owned subsidiary of the Bank, with the aim of focusing on the credit
cards line of business and to be capable of further expanding both locally and
regionally.

16

CrediMax products include Platinum cards, Internet credit cards CrediNet and the
unique smartcard-based loyalty program (MaxPoints).

Types of credit cards provide by CradiMax:
Islamic Corporate Card
Platinum Credit Card
Visa Corporate Card
Gold Credit Cards
Classic Credit Cards

Features:
Interest: 1.8-1.85%
Minimum Payment: 5% or 10 B.D. (whatever is higher)
Annual charges: None



Ahli United Bank B.s.c.


17
Types of credit cards provided by ahli united bank:
Gold credit card
Classic credit card

Features:
Interest: 2.5% 1.75%(for gold credit card)
Minimum payments: 3% of outstanding
Annual Charges: 10 B.D. annual (first free)- None for gold card












Types of credit cards provided by citibank:
Emirates-Citibank Credit Card
Gold Credit Card
Silver Credit Card

18


Features:

Interest: 2.59% 2.69% (gold)
Minimum Payments: 2.77% or 10 B.D. (whichever higher)
Annual Charges: 25 B.D. 50 B.D. Gold





Analysis

Age of respondents



Age No of respondents Percent
20 - 30 6 24
30 - 40 10 40
40 - 50 5 20
50 - 60 4 16
25 100
Table no 9.1 AGE OF RESPONDENTS

19


This shows that 40% of the respondents are of the ages between 30 to 40


How many credit cards do you have?





0
5
10
15
20
25
30
35
40
45
20 - 30 30 - 40 40 - 50 50 - 60
Age of respondents
Percent
Fig no 9.1
Options No of
respondents
percent

1
15 60%

2
3 12%

3
5 20%

more
than 3
2 8%
Table no. 9.2 No. of credit cards

20


This shows that about 60% of credit card users use only one card.

What is the name of the Bank that issued your credit card?

Bank No of
respondents
Percent
BMI Bank 10 22%
HSBC 8 17%
CREDIMAX(BBK) 7 15%
Ahli United Bank B.s.c. 6 14%
Citibank 5 11%
Standard Chartered Bank 3 7%
Ithmaar Bank 2 4%
Others 5 10%

1
60% 2
12%
3
20%
more than 3
8%
Number of credit card per person
Fig.9.2
Table no. 9.3 BANKS THAT ISSUED CREDIT CARDS

21

BMI Bank stands first among the banks that provide credit card facility.
Which type of credit card is mostly used?
0%
5%
10%
15%
20%
25%
Banks that provide credit card facility
Percent
Fig. no. 9.3
Type of credit card Percentage
Classic 36%
Gold 36%
Platinum 6%

22






As evident from the figure most of the people use classic and gold cards



Which companys credit card do you mostly use?





0%
5%
10%
15%
20%
25%
30%
35%
40%
Classic Gold Platinum Silver
Type of credit cards
Percentage
Fig. no.9.4
Silver 22%
100%
Company Percent
Visa 76%
MasterCard 22%
JCB 2%
Visa 76%
Table no.9.5 CREDIT CARD COMPANIES
Table.no.9.4 TYPE OF CREDIT CARD

23


Among the credit card companies, Visa provides almost three-fourth of credit cards in
Bahrain.
Which factors influenced you most to buy credit cards?







Visa
76%
MasterCard
22%
JCB
2%
Credit card companies
Fig no.9.5
FACTORS No of
respondents
Percent
Price 4 16%
Presentation of salesman 1 4%
insurance cover 2 8%
Cash withdrawal 8 32%
Others 10 40%
25
Table no. 9.6 FACTORS THAT INFLUENCD YOU TO BUY CREDIT CARDS

24

40% of the people selected the option as others. In that, most of them specified that
the most important factor that influenced them to buy a credit card was the availability
of credit to for purchasing.
Do you feel services provided by your credit cards are according to your
expectation?





Price
16%
Presentataion of
salesman
4%
insurance cover
8%
Cash withdrawal
32%
Others
40%
Factors that influenced you to buy credit card
Fig no.9.6
Options No of respondents percent
Yes 15 60%
No 10 40%
Table no. 9.7 ARE THE SERVICES PROVIDED BY CREDIT CARDS SATISFYING

25



About 60% of the people are satisfied with the services provided by their credit cards.

Do you think interest rate charged by the credit card companies is reasonable?









Yes
60%
No
40%
ARE THE SERVICES PROVIDED BY
CREDIT CARDS SATISFYING
fIg no.9.7
Option No of
respondents

percent
Yes 13 52%
No 12 48%
Total 25
Yes
52%
No
48%
Is interest rate reasonable Fig no.9.8
Table no 9.8 Is interest rate reasonable

26





Half of the people say that the interest rate charged by the credit card companies is
reasonable, but the rest of the people disagree with it.

After taking credit card(s), is there any increase in your expenditure?


Options No of respondents Percent
Yes 12 48%
No 13 52%



Yes
48%
No
52%
Is there any increase in your
expenditure
Fig no. 9.9
Table no 9.9 Is there any increase in your expenditure after taking credit cards

27
Half of the people testify that there was not much increase in their expenditure due to
the use of credit cards.


D
o you
feel
taking
credit
card
was a
good
decisi
on?







Options No of
respondents

percent
Agree 14 56%
Strongly agree 5 20%
Disagree 3 12%
Strongly disagree 3 12%
25
Table no 9.10 Do you feel taking credit card was a good decision

28


56% of the people agree that taking credit card was a good decision.

Would you like to switch over to another company's credit card?






Agree
56%
Strongly agree
20%
Disagree
12%
Strongly
disagree
12%
Do you feel taking credit card was a
good decision
fig no
9.10
Options No of
respondents
percent
Yes 5 20%
No 20 80%
Fig no 9.11 Would you like to switch over to another companys cards

29


80% of the people want to continue with their existing credit card(s).
CONCLUSION
Within the limits of the sampling errors, the finding of this project is that the most popular credit
card issuing bank in Bahrain is the bmi bank, as 22% of the respondents use credit cards issued
by bmi bank.
Gold and Classic cards are the most popular type of credit card as both are used by 36% of the
respondents.
Coming to the credit card companies, Visa stands first among all other companies with 76% of
the respondents using visa card.
Availability of credit for purchasing and cash withdrawal are the factors that influenced them to
buy credit cards and 60% of the respondents are satisfied with the services provided by credit
Yes
20%
No
80%
Would you like to switch over to
another company's credit card
Fig no 9.11

30
cards. Half of the respondents say that the interest rates are fine but their expenditure increased
after taking credit card.
56% percent agree that taking credit card was a good decision and 86% of the respondents are
satisfied with their current credit cards.
APPENDIX

QUESTIONNAIRE


1. Name _______________________________________

2. Age ______

3. Nationality _______________

4. Gender: Male / Female

5. Occupation __________________________

6. How many credit cards do you have?
a. 1
b. 2
c. 3

31
d. more than 3

7. What is the name of the Bank that issued your credit card?
___________________
8. Which type of credit card is mostly used?
a. Platinum
b. Gold
c. Silver
d. Classic

9. Which companys credit card do you mostly use? _______________

10. Which factors influenced you most to buy credit cards?
a. Price
b. Presentation of salesman
c. Insurance cover
d. Cash withdrawal
e. Others

11. Do you feel services provided by your credit card(s) are according to your
expectations?
a. Yes
b. No

12. Do you think interest rate charged by the credit card companies is reasonable?

32
a. Yes
b. No

13. After taking credit card(s) is there any increase in your expenditure?
a. Yes
b. No

14. Do you feel taking credit card was a good decision?
a. Agree
b. Strongly agree
c. Disagree
d. Strongly disagree

15. Would you like to switch over to another companys credit card?
a. Yes
b. No


33
BIBLIOGRAPHY

The websites visited for the completion of this project are as follows:-

http://www.scribd.com
http://www.answers.com/
http://www.wikipedia.org/
http://www.indexuae.com
http://www.mybahrain.net