Advances in Economics and Business Vol. 3(9), pp. 371 - 382
DOI: 10.13189/aeb.2015.030903
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The Rising Trend in the Use of Credit Cards in Bangladesh and Its Implications on Over-indebtedness and Its Difficulties in Personal Finance


Tajul Islam 1,*, Mohd. Redwanul Karim 2, Nurul Alam 3
1 Department of Business Administration, North East University, Bangladesh
2 Sylhet Women's Medical College & Hospital, Bangladesh
3 Business School, The University of Sydney, Australia

ABSTRACT

Research in the area of rising trend of credit card and heading towards debt has become a controversial issue since 2008 when the debt crisis began in European countries, especially with the collapsing of Iceland banking system. Since the Greek crisis arose, the relationship between credit card and consumer debt is being scrutinized among researchers and financial parties. As Credit card enables an individual to purchase certain products and services without having money in the account or paying immediately, it actually accelerate consumers to spend more and fall in deep debts. However, within credit limit set by the issuing company, and provide convenience and safety to the buying process it can also be considered as a good substitute for cash and cheque. Once a credit transaction is made, the customer is allowed either to make a full payment or to make a minimum payment within a specified period. The purpose of this study is to investigate the rising trend in the use of credit cards in Bangladesh and its implication on over-indebtedness and its difficulties in personal finance. To carry out this study a survey was conducted and 85 copies of a structured questionnaire were distributed among the credit card users of different banks in Bangladesh. This study found that majority of the participants (60%) face financial difficulties with credit card debt and to keep up repayments up-to-date and the accumulating debt is seriously affecting the budgeting and personal finance leading to erratic consumption and decreased saving and or no saving at all and thereby they were bound to modify their saving. On the other hand, the quality of services provided by the credit card issuers ranked by the users of credit cards as excellent by 2.4%, as good by 33%, average by 25%, poor by 15% and very poor by 25%. Various statistical tools and test, such as Analysis of variance (ANOVA), Z-test were conducted to test hypotheses and to analyze collected data. Various tables and graphs were also used for descriptive analysis.

KEYWORDS
Credit Card, ATM, Consumer, Debit Card, Goods and Services

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Tajul Islam , Mohd. Redwanul Karim , Nurul Alam , "The Rising Trend in the Use of Credit Cards in Bangladesh and Its Implications on Over-indebtedness and Its Difficulties in Personal Finance," Advances in Economics and Business, Vol. 3, No. 9, pp. 371 - 382, 2015. DOI: 10.13189/aeb.2015.030903.

(b). APA Format:
Tajul Islam , Mohd. Redwanul Karim , Nurul Alam (2015). The Rising Trend in the Use of Credit Cards in Bangladesh and Its Implications on Over-indebtedness and Its Difficulties in Personal Finance. Advances in Economics and Business, 3(9), 371 - 382. DOI: 10.13189/aeb.2015.030903.