Factors Affecting Debit Card and Credit Card Use in India
Abstract
The banking sector is introducing various financial innovations by providing various products and services to its customers. The access to debit card and credit card has increased, but their proper use is important. The current study aims is to explain the various factors affecting the use of debit card and credit card in India. The unit-level data from the 77th round of national sample survey has been accessed and analyzed and the result has been the use of multivariate logistic regression techniques and marginal effect analyses.
The study has found that the education level, the cards’ major urban-place usage by regular wage and salaried individuals based on their source of income, the value of the financial assets and wealth quintile are in principle positively associated with their wide popularity, However, senior citizens and females are negatively associated with the use of debit card and credit card in India.
The study recommends that banks and financial institutions should take more efforts to popularize and increase the use of debit card and credit card also in rural areas. These cards should be made more user-friendly to senior citizens, and females. Furthermore, banks, financial institutions and policy makers from the eastern and western regions of India should take more initiative to increase the use of debit card and credit card.
Finally, the study recommend that banks and financial institutions should create more awareness about use of debit and credit cards and their benefits, increase the number of ATMs and reduce the annual fees charged on issuing debit and credit cards especially in remote and rural areas of the country.
