TITLE: A STUDY ON CONSUMER AWARENESS ON CREDIT CARDS

Abstract:

Credit cards provide benefits to consumers and merchants not provided by other payment
instruments as evidenced by their explosive growth in the number and value of transactions over
the last 20 years. Recently, credit card networks have come under scrutiny from regulators and
antitrust authorities around the world. Focusing on interrelated bilateral transactions, several
theoretical models have been constructed to study the implications of several business practices
of credit card networks. Suggestions for future research are also discussed.

The phenomenal growth witnessed globally in the 20 th century in the manufacturing industries
sector helped fulfil man’s physiological needs like food, shelter and clothing in a big way.
Increasing demand for awareness of these needs engineered the proliferation of companies
involved in their manufacture of variations to the same product. Simultaneously, economic,
social, cultural and technological development of society led to the growth of the service
industry.

Further, society also exhibited increasing affluence combined with growing

complexity of life. The world- wide boom witnessed in the consumer. Credit card only marked
the beginning of the new era of banking and financed system. It has also became a practice
among the trading firm to extend liberal credit to customers.

INTRODUCTION
Money in the twenty first century is found in the form of coins, currency notes, and now
in the form of plastic money. Today, every credit card carries an identifying number that speeds
shopping transactions. Credit card in India are gaining relevance to facilitate industrial and
commercial transaction as payments are not made by cherub any more since the dealer is always
apprehensive whether the cheque would honored and dealer would deliver the goods after the a
couple of days once the payment was made with the introduction of plastic money all these
problems have been taken care of .has individuals today own more than one card in their wallet
such as credit card ,debit card ,ATM card ,smart card etc… which takes care of all expenses for
the day whether durables are to be bought, restaurant bills to be cleared or even for the payment
for conveyance, a person just has to use the appropriate card and the transaction is complete.

Today credit card industry is highly comparative and almost all the banks are offering
credit card in association with visa international or master card. There is now a flood of Indian
banks offering credit card to the potential customer.

Multinational banks operating in India have also joined the bandwagon with high voltage
advertising and seemingly competitive reward programmers for loyal credit card user. Bank’s
income from revolving fee (interest charge for revolving credit) and other fee. Indians credit card
market is growing at almost 30-40 per cent annually and the number of credit card in circulation
is twenty seven and half million as reported by credit card issuers.
Origin of Credit Cards
On February 28, 1950 – A Diners club card, the first multiuse credit card was issued. This
marked the
beginning of the era of plastic money. Diner‟s card was launched in the Indian market in 1960.
The Central Bank of India was the first bank in the country to introduce credit card system in
August 1980, followed by several other banks. In India, both foreign and Indian banks are doing
credit card business.

The foreign banks have a dominant share due to various reasons like having been in the
field for decades, sound operational and financial strength, strong brand reorganization etc.
Later, with the aggressive entry of SBI, ICICI, and HDFC Banks the rules of the game
changed. Among the banks issuing credit cards, the esteemed and well published cards are
Citibank Diner‟s Club Card, Citibank Visa Card and Credit Cards, Bank of Baroda‟s Master
Cards, the SBI Credit Cards, Bank of India‟s India Card, Canara Bank‟s Can Card and ICICI
Bank‟s ICICI Card. These cards are positioned in a manner which gives an impression that the
cards can be acquired by people from not only the upper class but also the middle income
 categories. The new private sector banks like ICICI and HDFC have adopted a strategy of
reaching lower down the income strata by lowering down their eligibility norms. Today credit
card industry is highly competitive and almost all the banks are offering credit cards in
association with Visa International or Master Card.

1.2 Current Trends in Credit Card Industry

There is now a flood of Indian banks offering credit cards to the potential customers.
Multinational banks operating in India have also joined the bandwagon with high voltage
advertising and seemingly competitive reward programmes for loyal credit card users. Banks‟
income from credit cards can be divided mainly into four components namely annual fee,
interchange charge, revolving fee (interest charged for revolving credit) and other fees. Indian
credit card market is growing at almost 30 to 40 per cent annually and the number of credit cards
in circulation is twenty seven and half million as reported by credit card issuers

NEED OF THE STUDY

Credit cards have changed the way people look at money. Gone are the days when only
the rich sported them at limited counters in select cities. Today, they are a way of life for the
middle class too, even in smaller locations across the country. However, this boom has brought
in a lot of complications like credit card fraud, payment defaulting, unsolicited card,
uncontrolled spending etc.

OBJECTIVES OF THE STUDY:

 Primary Objectives :

 To know the reasons for using credit cards.

 To know the preference for using ICICI bank credit cards.
 To know the Customer awareness regarding the credit card.
  To know the preference for various other bank credit card.
 To know the rate of preference for using ICICI bank credit card with other bank
credit card.

 Secondary objectives :
 To find the frequency of usage of their Credit card for daily purpose.
 To find the awarenesslevel of the Credit Card.
 To find out who prompted the customer to apply for a particular Credit Card.

 To find out the range of the age where the largest number of users fall in.

 To find the percentage of multi credit card users.

SCOPE OF THE STUDY

The study undertaken for usage of credit card by the customer and to know the
preference regarding the ICICI Bank credit card and also the preference for various other bank
credit card and aims to find the reason of choice for selecting a particular Credit card and relative
preference of customers for various credit.
 This study is done with the help of a questionnaire which contains questions
which probe into the details so as to find the reason of their choice. The study will help to know
the features which attracted the customers. The study helps to know about the usage pattern of
credit card users. The study also helps to find the best possible way of reaching the customers.
The study will also helps in choosing a best credit card bank. All these results will help the
consumer to know the features, functions and to create awareness of using credit card. This
study will also help the bank to create a product which suits the high profile customers and helps
to adopt a particular method to reach the customers.

LIMITATIONS OF THE STUDY

The limitations of the study are as follows

 The study is applicable only to the credit cardholder. It is not be fully applicable to other

cardholders.

 In some cases the cardholder is not fully aware about their bank credit card.
 • The area of study is limited to cities and towns only ,because most of the village people

do not have a credit card.

• During the collection of data, respondents are not responding with their full

interest.

• As it is a sensitive topic, the respondents have not given clear information. So researcher

was unable to conduct in depth study.

• In some cases the respondents does not remember the exact usage pattern which creates a

bias.

• Sample size of the project is very small, so we can’t come to an clear idea about the

project.

• Some customers where not available.

RESEARCH METHODOLOGY

• Research Design
A research design is a detailed blue print used to guide a research study toward its objective. The
process of designing a research study involves many interrelated decisions. The most significant
decision is the choice of research approach, because it determines how the information will be
obtained. The choice of the research approach depends on the nature of the research that one
wants to do.

A research design is the arrangement of conditions for collecting and

analyzing of data in a manner that aims to combine return to the research purpose with economy
in procedure.

The research design adopted for this study is Descriptive Research.

Descriptive method was adopted because it deals with description of the state of affairs as it
exist at present. Determine the frequency with which something acquire or its association with
something else. It is to formulate based on the objective of the study.
• Sampling Design

Simple random sampling technique is used for collection data from 50 respondents from the
total population of credit card users.

Simple Randon sampling

The unrestricted, simple random sampling is the simplest form of probability sampling.
Since all the probability samples must provide a known nonzero chance of selection for each
population element, the simple random sampling is considered a special case in which each
population element has a known and equal chance of selection. In this section, we use the simple
random sample to build a foundation for understanding sampling procedures and choosing
probability samples.

Simple random sampling is often impractical. It requires a population list that is often not
available. The design may also be wasteful because it fails to use all the information about a
population. In addition, simple random design may be expensive in time and money.

Sample unit

The sampling unit has taken by the researcher for selecting the samples with different
credit card customer from ICICI bank and various other banks.
Sample size

50 samples have chosen to find the objective of the study.

• Method of Data Collection

Questionnaire method of data collection is the most common instruments of data
collection it contains a set of questions logically related to a problem of study. The respondents
were required to answer the question by themselves, the questions are explained to the
respondents because all of them are uneducated. The researcher believed that, the questionnaire
framed might lead to gather the relevant data’s in a successful manner. The researcher framed the
questionnaire in English.
The questionnaire was based on different data namely.
 Personal data
 Personal expenses
 Usage of credit card
 Security
 Customer care
 Risk coverage
 Interest charges
 Discount facilities
 Drawbacks and
 Quick process

Source of data collection

Data can be obtained from various sources.

1) Primary data
2) Secondary data

Primary data
 The researcher with the help of questionnaire collects the primary data. The questionnaire
was described specially for employees. The primary data was collected from the employer
through personal interview method. The questionnaire consists of both closed and open-end
questions. Were used to significant the unit of the employees with lesser time of answering to the
questions.

Secondary data

Secondary data has been collect by the researcher from the details of welfare schemes
offered, company profile, organization structure, Earlier records from journals, magazines and
others sources etc.
Statistical Tool:
Percentage Method:

In this study, the researcher has used the percentage analyses method. Percentage
analyses are done to determine the percentage value for all the different questions used.

Percentage used for making comparison between two or more series of data.

No. of respondents
Percentage % = __________________________ X 100
Total no. of respondent
 CHAPTERISATION
Detailed/final Project Report will include the following chapters
Chapter –I Introduction
Significance of the study
Need of the study
Objective and scope of study
Methodology
Limitations
(Details of methodology used in studying and collecting the data and issue will be
described)

Chapter –II literature review

Chapter –III Industry & company profile

Chapter –IV Analysis of the topic & Interpretation

(Descriptive work on the topic, this chapter will include analysis and interpretation of
data tabulation and categorization)

Chapter –V
Recommendation
Bibliography
Appendix-1
BIBLIOGRAPHY

Books :

 Banking and financial system – by N.D Kapoor

 Research methodology – by Uma Sekaran (John Wiley & Sons, INP)
 Origin of the banking financial system – Andrew McFarland Davis

Websites:
 www.google.com
 www.wikipedia.com
 www.icicibank.com
 www.credit.com
www.yahoo.co.in