Abstract
Debit and credit cards create a network of externalities, which are secure and convenient. In modern society, credit cards are necessities and form a unique consumer culture. The main aim of the study was to investigate the attitudes towards credit/debit among grandparents and children. The literature indicated that attitudes towards credit and debits were influenced by the benefits of convenience. A descriptive research design was used in the study. The sampling design was the simple random in which 90 grandparents and 200 children were included in the study. The mode of data collection was the use of interviews and questionnaires. Various statistical packages such as the SPSS were used to analyze the data collected.
The study findings indicated that there was a positive trend in the use of credit cards among grandparents and children. However, there were reservations and worries in relation to incurring debts. The research provided important information that could be used by financial institutions and businesses to design debit and credit cards that meet the requirements of the two groups
Introduction
The debit and credit cards play a critical role in the field of money and banking sector (Roberts & Jones, 2001). The cards create a network of externalities, which are secure and convenient. In modern society, credit cards are necessities and form a unique consumer culture. For instance, credit and debit cardholders enjoy the convenience of paying for services and goods using the cards. Despite the increased platforms for debit and credit, people have varying attitudes towards credit and debit.
Objective and Significance of the Study
There are many studies conducted to examine the different aspects that relate to debit and credit use. For example, there have been studies to explore the security features and level of acceptance of the debit and credit cards. According to Kumar (2013), attitudes influence the acceptance and usage of credit and debit. Even though there are many studies that have explored the issues of attitude, the main aim of this study was to investigate the attitudes towards credit/debit among grandparents and children. Earlier studies pointed out that the use of credit and debit across the various age groups varies (Kempson, Collard & Taylor, 2002). However, there have been limited studies on the attitudes towards credit and debit use among children and grandparents. The study endeavored to investigate the attitudes in relation to senior citizens and children.
The study findings provided pertinent information related to the two groups. For example, the findings obtained could be crucial for businesses when deciding which group to target in the products they are offering. Finally, the policymakers could use the information to determine what policies need to be formulated to guide issues of debit and credit in relation to the different age groups.
Overview of the Report
The report is organized into various sections. The first section is the introduction, which provides a general overview of the credit and debit cards. The second chapter covers the literature review, which critically analyzes earlier studies. The third section is the methodology. It outlines the study design and the techniques applied to collect and analyze data. Chapter four is the quantitative and qualitative findings of the study, while chapter five is the analysis of the findings and their implications. The final section of the report is the conclusion, which provides a summary of the findings and their implications.
Literature Review
Investigations carried out by previous researchers reveal a number of issues about consumer attitude towards debit/credit. For example, studies conducted by Mansfield, Pinto, and Robb (n.d.) indicated that credit cards stimulate spending behavior. Findings by Ahmed, Amanullah, and Hamid (2009) showed that there is a positive relationship between the income level of a person and the ability to own a credit card. In addition, the profession of the consumer was found to influence the attitudes towards a credit card (Ahmed et al., 2009).
According to Dominy and Kempson (2006), the levels of debt normally rise at the ages between the mid-30s and mid-40s. The majority of people in the middle ages and those actively in employment hold the debit and credit cards. A study conducted by Ron (2008) pointed out that the use of credit and debit cards has significantly risen. The findings relate with a study conducted by Juson and Lin (2012), who established that at the point of sale in various states in the United States, the use of debit and credit cards had greatly increased. Jusoh and Lin (2012) noted that whenever the debit and credit cards are used, there is a subsequent increase in the volume that is purchased. Hayhoe et al. (2010) stated that the increase in the use of credit cards implies a positive attitude towards credit and debit.
In an extensive study to investigate the attitude of consumers towards credit and debit cards and the factors that influence the acceptance of the cards, Kumar (2013) found that the majority of the card users included the people in employment. The majority of consumers preferred debit and credit cards because of their flexibility and convenience. The study contradicted earlier studies that pointed out that consumers have negative attitudes towards credit cards due to the probability of accruing outstanding balances. In yet another study, Chien and Devaney (2001) established that flexibility, ease of use, security, and convenience were the main determining factors that influenced consumers to use credit and debit cards.
The literature review pointed out that the use of credit and debit cards in modern society is influenced by the benefits of convenience and revolvers. The cards are also used as a means of financing. Therefore, the attitudes that relate to credit/debit revolve around the convenience and financial aspects. However, the studies failed to incorporate the aspect of various age groups. This is despite the fact that there have been significant increases in the number of people using credit and debit cards irrespective of age. The literature provided a basis for ascertaining the increase in the use of credit cards and the factors that influence the use of cards. The literature implied that there was a generally positive attitude towards credit and debit cards. Thus, the current study explored the attitudes towards credit and debit cards with a key focus on particular age groups whose attitude and adoption of the credit and debit was not extensively addressed in earlier studies.
Research Methodology
Research Designs
The study design applied was a descriptive research design. According to Mitchel and Jolly (2010), descriptive research design is critical in providing answers that relate to a given societal situation. The study entailed the use of questionnaires and interviews. The questionnaires were designed for the children while the interview was to collect data from the old people. The children included the age groups between 12 and 18 years. The other target group was the older people described as the grandparents; the group included the people aged above 60 years.
Sampling Frame and Sample Size
A sample is usually drawn from the target population. The sampling frame represents the working population that is to be utilized in the study (Kothari, 2005). The age group specifications served as the main inclusion criteria. The sampling technique applied was the simple random sampling procedure. The random sampling gave all the participants in the sample frame an equal chance of representation in the sample. The sample size for the elderly was 90 grandparents. The children included in the study were 200. The questionnaires were sent to all the children via electronic mail.
Data Collection Methods
The data collection methods that were applied included the interviews for grandparents and questionnaires for the children. The interviews were guided discussions, as they were to probe specific information from the respondents. The information collected in the interview process was typed, recorded, and preserved for the analysis. The questionnaires used for the study were clear and succinct and in line with the research objectives.
Data Analysis
The statistical package for social sciences (SPSS) was used to analyze the data obtained from the grandparents. A correlation was computed by the use of the crosstabs and Chi-square tests. The significance of the predictors was tested using multivariate logistics. In addition, a cross-sectional time-series analysis was used in the study. Through the cross-sectional time analysis, the causal relationship between the use and attitude towards credit and debit was easily established.
Findings/Results
The main objective of the study was to investigate the consumer attitude towards credit/debit, with the key target group being the elderly citizens and the children. The children comprised of the age group between 12 and 18 years. The main objective was to identify the perceptions and the knowledge of the two groups towards the debit and credit. The number of people sampled in the two groups was inclusive in terms of gender. In the elderly group, men comprised 46%, while among the children, boys were 57%.
The interviews and the questionnaires were used to interrogate the level of personal attitude on the credit and debit. Furthermore, the methods of data collection sought to establish the reasons behind the attitudes towards credit and debit. The study established that 32% of the grandparents had a negative attitude towards debit and credit. There were 12% of the elderly with a moderate attitude towards the debit and credit cards. The grandparents with a positive attitude towards credit and debit accounted for 56%. In the case of the children, a similar trend was observed with the majority of the children indicating positive attitudes towards the use of the debit cards. However, most of the students did not have adequate knowledge of the credit cards. The children are considered as minors, and thus they do not qualify for credit advancements.
The results showed that in the two age groups, over 50% of the respondents had a positive attitude towards the debit and credit. The results obtained relate to previous studies that have pointed to increased acceptance of the credit and debit across the globe. According to Joo, Grable, and Bagwell (2001), debit and credit cards have revolutionalized customers’ experience and ignited a new customer culture. Across the gender divide, there was no significant difference in attitudes towards the credit/debit cards. The findings are also in line with Joo et al. (2001) findings that established that gender does not influence the attitudes and perceptions towards credit.
However, the spending in relation to credit/debit varies across the gender divide. The findings consist of Hayhoe et al. (2000) findings that pointed to significant differences in spending based on gender. The respondents cited the positive security features and the convenience that relate to credit and debit as a reason for the inclination towards the usage of the cards. In addition, the increased flexibility associated with credit and the current consumer culture was cited as the main reason for the positive attitude towards credit and debit. As a result, many respondents attested that they possessed a debit or credit card.
The creditworthiness and availability of income influenced the attitude towards the credit card. In relation to the children, the income level affected the attitude towards the debit cards. The findings were in line with findings by Ahmed et al. (2009) that established that there is a positive relationship between the income level of a person and the possibility to own a credit or debit card. Despite the positive attitude towards the use of the credit cards, the grandparents were concerned about the increased risk of incurring debts. For instance, 32%who had a negative attitude towards the credit card were concerned about the future consequences of having a credit or debit card. Factors contributing to the negative attitudes included the possibility of compulsive buying and the constraints of the budget.
Analysis
The findings point to several issues that influence the attitudes towards debit and credit cards. The key to the findings is the changing trend towards acceptance of the credit and debit cards. The study was specific to the elderly and children. According to Kempson et al. (2002), many financial policies and marketing of finance products focus on the middle-aged and the working class. The positive attitude towards the debit and credit cards pointed to new financial inclinations and consumer culture.
For instance, the use of credit has been on the increase among the elderly. The significance of the changing trends is that there is a need for the credit extension facilities and issuers of debit cards to design products that will fit the needs of the elderly and the children. Therefore, financial institutions should come up with policies that address the needs of the two groups and ensure that their financial concerns are solved. The grandparents preferred the convenience that comes with the use of debit or credit for the payment of hospital bills and the purchase of basic products. The implication is that among the elderly, there is a need for customized credit and debit cards that are specific to the customer needs. The customization of the credit and debit cards will increase the uptake, and the positive attitudes are likely to increase.
The elderly raised reservations related to the fear of overspending and impulsive payment as a major restricting factor that affected the use of debit and credit cards. The reservations were very high among the significant 32% elderly with negative attitudes towards the debit and credit cards. According to Roberts and Jones (2001), the majority of credit card users are at a high risk of incurring debts. Neuner, Raab, and Reisch (2005) noted that there is a tendency for the credit and debit cardholders to spend compulsively. In the case of the children, there was also the possibility of overspending to cater to the lifestyles, mainly due to peer influence.
The implication for such a trend is that there is the risk of not meeting the budgetary allocations. The findings necessitate the need for strategies such as financial awareness on the use of debit and credit cards among the general population. The misuse of the credit and debit card cuts across the age groups divided. Mansfield et al. (n.d) noted that unlike the cash, debit, and credit cards provide a high likelihood of unconscious spending.
There was a common concern among the grandparents on the issue of compulsive buying. They pointed out that the possibility of compulsive buying discouraged their use of the credit and debit cards. Despite the reservations, very few elderly attested to being involved in impulsive buying. The credit cards have become an important form of borrowing embraced by the grandparents in cases of emergency. Unlike earlier studies that pointed that the use of the credit cards by other age groups is associated with lifestyle consumption, the elderly were found to be cautious about the credit cards; they used them only when it was essential.
In a qualitative study conducted by Kempson et al. (2002), the attitudes of older people in relation to borrowing were found to be influenced by individual financial factors. As a result, only a few elderly people interviewed were at ease to use credit cards. The unsecured borrowing that is an essential characteristic of the credit cards contributed to the relatively high number of elderly with a negative attitude towards credit. However, the elderly were very positive about the use of credit cards to pay for food and to cover medical bills.
The attitudes towards the use of credit were influenced by different economic and social circumstances. According to Joo et al. (2001), the different experiences between the old and the young influence the attitude towards the credit. The research pointed out that there are generational differences in relation to credit and debit cards. For example, children with debit cards were found to be spent free. The children also noted that though they did not own credit cards, they would prefer to acquire a credit card in their future lives. The reason behind the need to have the credit card was related to spend without restrictions.
This notion pointed to gaps in financial literacy among the young generation. Very few of the interviewed children were aware of the accumulation of debt and its implication on their financial statuses in the future. On the other hand, the older generation aged above 60 years was very cautious about the use of their credit cards. The old people knew about the risks of overspending using credit cards. Thus, they embraced measures that ensured that they did not get into financial difficulties. According to Dominy and Kempson (2006), the trend is due to fears of the fixed income as most grandparents rely on retirement pension. Therefore, the socio-economic differences between the elderly and the children affect the attitudes and perceptions towards the usage of credit and debit in the two age groups.
According to Kempson et al. (2002), attitudes influence credit and debit cards to use. The analysis of the descriptive data collected from the elderly pointed out that they minded the amount they spend or borrow. In a specific interview question to the elderly on how they felt about buying goods on credit, the majority of the elderly believed that it was not a desirable action. The analysis of responses to the question among the children pointed to an overwhelming acceptance that the credit buying was convenient and good.
Though the children did not hold the credit cards, there was a strong indication that they were not aware of financial debts that may arise from uncontrolled credit buying. The findings agreed with findings by Ron (2008) that the psychological wellbeing and financial situations influence the attitudes towards debit or credit. The findings provide the basis for understanding financial literacy.
Studies have shown that levels of consumption are high among consumers who have debit and credit cards. The implication for the trend is a reduction in the saving-investment among the cardholders. The positive attitudes towards the acquisition of the credit cards point to financial attitude change that has contributed to the increasing use of the cards among the different age groups. The use of debit or credit cards increases financial interconnectedness; they have the effect of reducing the bank and the cash balances. Specifically, the grandparents pointed out that the credit cards contributed to increases in debts; hence, the danger of getting financial deficits. On the other hand, though the debit cards did not lead to debts, they increased the possibility of increased impulse buying among young people.
Conclusion
The evidence gained from this report points that there have been changes in the attitude towards the credit and debit cards among the grandmothers. The positive attitudes have resulted in increased usage of credit and debit cards among the elderly. Despite the positive attitudes among the elderly and the usage of the credit, there was great concern about the financial implications of the indebtedness that may result due to the use of credit cards. Among the children, there are also positive attitudes towards credit card use. However, the children do not qualify to have credit cards.
The results present a generational attitude towards credit and debit card use. The data was collected using primary methods of data collection. Therefore, the findings provided an accurate picture and attitudes inherent in the age groups studied. The primary sources of data were critical in the collection of data with high credibility. However, the issue of personal bias could not be ruled out in the data collection from the two target groups.
It is evident that the debit and credit cards have bred a new consumer culture that crosscuts the age divides. With the increase in the number of grandparents and children using credit and debit cards, there is a need for further studies to address pertinent issues that relate to credit and debit cards. Thus, there is a need for further studies on the effects of credit and debit cards on the elderly and the young. The study should examine the management of cash and debt controls in the two groups.
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