The intent of this chapter is to supply a reappraisal of the research workers that has been published in countries related to the subject. Before analyze the gathered day of the month and information, it is of import to give a clearer image and construct about the research subject to the reader about the ground to build the research. This is the chief intent for composing the literature reappraisal. When composing the literature reappraisal, some of the of import issues and benefits are raised up and discussed to back up the dependant variable. Basically, the independent variables that affect the use of recognition card are demographic factors such as age, gender educational degree and income, others variables are perception towards hazard, convenience, fiscal cognition. An apprehension of how all the variables are related to each other is really critical as it will assist research workers to understand more on factors affects the recognition card use.
Gender has been found to be a important factor in finding recognition card use. White ( 1975 ) , and Adcock et Al. ( 1977 ) , the early surveies stated that individual males were more likely to utilize recognition cards than females. Contradicting this, both Kinsey ( 1981 ) and Arora ( 1987 ) found females used their recognition cards more frequently, while Hayhoe et Al. ( 1999 ) and Armstrong and Craven ( 1993 ) besides found that female have a higher mean figure of recognition cards compared to males.
There are besides evidences demo the impact of gender on types of recognition card purchase is important, where females use recognition cards for buying vesture, personal properties, family goods ( Lindley et al. , 1989 ; Hayhoe et al. , 2000 ; Kaynak and Harcar, 2001 ) . Meanwhile, males use the recognition card for the intent of amusement, electronics, travel and nutrient off from place ( Kaynak et al. , 1995 ; Hayhoe et al. , 2000 ; Kaynak and Harcar, 2001 ) .
Besides, some research workers had showed that adult females really understand their recognition cards better than work forces, which is consistent with a survey on pupils ‘ cognition about debt from fiscal assistance ( Hira and Brinkman, 1992 ) . They found female pupil had a better apprehension of their fiscal state of affairss.
Another survey between recognition card use and gender was carried out by Hayhoe, Leach, Turner, Reuin, and Lawrence ( 2000 ) . It was showed by their way analysis theoretical account that there was a important difference in the fiscal patterns and fiscal stressors of male and female pupils. In a more recent survey by Lyons ( 2004 ) , she identified college females do confront jobs in doing the payments on clip that indirectly make them make non keep inordinate sums of recognition card debt.
Age is another determiner that has been investigated for the usage of recognition cards. Age plays a important function in the consumer determination doing procedure ( Schwarz, 2003 ) . Harmonizing to Peterson ( 2007 ) consumers tend to act otherwise as consumers lean to back up their determinations on different sets of values, based on the peculiar age group.
Barker and Sekerkaya ( 1993 ) suggested that the holder and user of recognition cards were made up by the in-between -aged group. Another survey about consumer attitudes and purposes towards recognition card ownership in Turkey that done by Kaynak and Harcar ( 2001 ) found out that the age group between 36 and 45 is more likely to have recognition cards compared to other group.
Kim and DeVenay ( 2001 ) besides stated that the chance of being a recognition card six-gun will increases till the age of 37 and it will diminish after that onwards. This is because younger consumers have a stronger inducement to borrow since they are confronting with fiscal obstructions like lower income and high disbursals of raising a household. Based on the writer ‘s findings, it is rational to state that older consumers are more likely to be recognition card convenience users than the younger 1s.
In contrast, in the yesteryear, there are some research workers have reported a negative impact of age on recognition card use ( Awh and Waters, 1974 ; Adcock et al. , 1977 ; Wasberg et al. , 1992 ) .
And, Danes and Hira ( 1990 ) besides stated that older households may non accept the recognition cards is usage for funding intent compared to younger households who have grown up utilizing recognition cards.
Garmen and Bach ( 1995 ) show that grade school pupils more likely to larn money direction patterns more expeditiously from their parents compared to adolescents therefore it logically follows that a college pupil tend to pull off their money ill if his parents are hapless at pull offing their money. Brobeck ( 1992 ) besides did a survey on the consequence of age on attitudes towards recognition cards. He found that younger card holders worrying about paying the monthly recognition card measures. Specifically, high school pupils and freshers in college besides want to larn about fiscal cognition like accessing information on their recognition history and cognize more about their rights as recognition card holders.
2.3 Education Level
Research workers have found instruction to be the most of import demographic variable that positively related to recognition card use. Canner and Luckett ( 1992 ) found that the individual who receive higher instruction tend to bear down more on their recognition cards. Based on Danes and Hira ( 1990 ) and Barker and Sekerkaya ( 1992 ) , they indicated that respondents that receive higher instruction of cognition of consumer recognition tend to utilize recognition cards more frequently.
Based on DeVaney and Rutherford ( 2009 ) , it is true that higher degrees of instruction will convey many advantages to consumers like they will hold more opportunity to have higher paying occupations. However, the 1 that more likely to be convenience users of recognition card are those who have college grade, while those lone receive high school instruction and some college instruction were non likely to be convenience recognition card user. Hence, the writers suggested that pedagogues need to better fiscal direction instruction particularly in in-between schools and high school as pupils are likely to be convenience recognition card users if they are provided with strong fiscal direction tools early in their life.
Kim and DeVaney ( 2001 ) noted a important relationship between achieving more instruction and recognition card use. Furthermore, Hazembuller et Al. ( 2007 ) stressed the importance of instruction in holding control over recognition card balances. Therefore, it is predicted that persons with higher degrees of instruction will be more likely to be convenience users of recognition cards.
Munro ( 1997 ) besides found that the 1 that make a better usage of the recognition cards are those who already acquired cards before college, compared to senior or graduate pupils those who acquired their cards during college. But, in contrast, one of the surveies done by Danes and Hira ( 1986 ) show those high-level pupils and those who lived off-campus obtain more cognition sing recognition cards and general fundss compared to lower-level pupils and those who lived on-campus.
Income is another of import variable that will act upon the recognition card use rate. The person that have greater income tend to have more figure of recognition card ( Kaynak and Harcar, 2001 ) . Kinsey ( 1981 ) stated that there are positive relationship between the figure of recognition card histories and income as he found out higher incomes households were more likely to utilize recognition cards than were lower income households. In contrast, Danes and Hira ( 1990 ) found the opposite consequences that lower- and middle-income households use more recognition cards than higher-income households since they tend to utilize recognition card as a mean of installment.
Furthermore, Barker and Sekerkaya ( 1992 ) reported that the recognition card holders were more likely to gain higher incomes than their opposite numbers. Wasberg et Al. ( 1992 ) besides stated that that there were positive relationship between the sum of recognition card debt and family net income.
On the contrary, Choi and DeVaney ( 1995 ) reported that income does non hold any important consequence on use of recognition cards.
Armstrong and Craven ‘s ( 1993 ) general determination that females tend to keep more recognition cards than males by proposing females that hole multiple cards are more likely semen from in-between income group, and they tend to see recognition cards as “ position symbols ” if they come from lower income group.
Largely, the low income users will utilize recognition cards for the installment intent compared to convenience, safety, or designation characteristics. It has been suggested that low income consumer need the installment characteristic of recognition cards to allow purchases like cars, trappingss every bit good as others consumer durable goodss ( Jeans S. Bowers, 1979 ) .
In a more recent research, it shows there is a important relationship between recognition card use and household income degrees ( Baeck & A ; Kim, 2005 ; Hazembuller et al. , 2007 ; Kerr & A ; Dunn, 2002 ) . However, based on Kerr and Dunn ( 2002 ) every bit good as Baeck and Kim ( 2005 ) , they have different sentiments as they suggested those recognition card users that have higher income were more likely to be six-guns, which means the recognition card holder that do non pay the full sum due. Meanwhile, Hazembuller et al. , ( 2007 ) suggested that consumers that holding higher income are the convenience users, which mean they pay the sum due within the charge period.
2.5 Perception toward hazard
Greater information item with merchandises of high complexness can be associated with greater perceived hazard every bit good as the demand for more control excessively. Hazard is frequently viewed as an ancestor of engagement particularly when the monetary value is high and the consumer ‘s hazards losing money. Harmonizing to Black and Morgan ( 1999 ) recognition card holders became more hazardous clients from clip to clip. And, they besides mentioned that in twelvemonth 1995 cardholders were poorer, individual position, carried high balances recognition card, and had a high debt ratio.
The hazard averse cconsumers demand for less debt ( Crook, 2001 ) . The survey suggested that consumers might be wary of they will pay more for a purchase as a consequence of the extra involvement charges. However, Duca and Rosenthal ( 1993 ) showed that many financially-struggling households really demand more household debt like recognition cards, when they are risk averse. This could be explained that some of the consumers may be afraid to borrow loan from bank, for illustration house mortgage or auto loan, as they feel the hazard are excessively high. But, a “ junior-grade ” loan like recognition card debt does non makes them experience hazardous although the fact that the costs of the debt may be higher in the existent life.
Hazembuller et Al. ( 2007 ) besides found that most of the recognition card six-guns were the recognition card users who had low-risk tolerance. Their survey concluded that low-risk tolerance consumers are more likely to experience that recognition cards provide low-risk recognition chances meanwhile consumers with bad tolerance are less likely to see and utilize recognition cards as debt since they are holding better chances with other loans.
Hence, based on Duca and Rosenthal ( 1993 ) every bit good as Hazembuller et Al. ( 2007 ) surveies, it is indicated that high degrees of hazard tolerance will may hold a important positive impact on being a convenience user.
Literature on the usage of recognition cards for convenience was found in the early by Slocum and Matthews ( 1969 ) , who found that lower socio-economic categories people used their recognition cards for installment funding while the higher socio-economic groups used recognition cards for convenience.
Besides, Canner and Cyrnak ( 1986 ) showed most of the consumer usage recognition card was because of the convenience, and this factor besides positively correlated with income, age, and comparative fiscal liquidness. Carow and Staten ( 2002 ) besides found that convenience and rebates become the chief grounds for consumers to follow bank recognition card.
Kinsey ( 1981 ) found that the easiness of payment and the hazard of consumer to transport the hard currency around were major grounds that affect consumer to utilize recognition card. Similarly, harmonizing to Barker and Sekerkaya ( 1992 ) , the important ground for consumers to utilize redit card was the easiness of payment and hazard fee of transporting hard currency. And, Kaynak and Harcar ( 2001 ) besides stated that convenience factors besides attribute to the use of recognition cards which are, recognition cards are extremely accepted by society and consumer may entree to hard currency easy.
Chan ( 1997 ) that did a survey on active and inactive cardholders in Hong Kong, found that the consumer in Hong Kong look into the economic factors when they make up one’s minding to utilize recognition cards such as “ long interest-free refund period ” and a “ low one-year fee ” .
On the other manus, in a wide survey done by Meidan and Davos ( 1994 ) about factors affect recognition card choice in Greece, found that convenience factor are more of import compared to the position symbol which is the least of import factors. This was because the consumer in Greece tend to utilize the recognition cards for the convenience intent instead than to demo off their position.
Kaynak et Al. ( 1995 ) stated that consumers with lower and in-between incomes and with high school or lower instruction are likely to value recognition characteristics such as safety and convenience compared to the service characteristics. Besides, the writer findings besides showed that the grounds for consumers to follow recognition cards use was because of the factors such as “ handiness of exigency financess through recognition cards ” , “ convenience during travel ” , and “ shopping without paying hard currency instantly ” .
2.6 Financial Knowledge
Liebermann and Flint-Goor ( 1996 ) suggested that anterior cognition of an issue can hold an impact of one ‘s information processing. Petty and Cacioppo ( 1986 ) besides stated that those persons that holding higher degree of cognition are more likely to concentrate on and process message statements, and, therefore, they have higher possibility to do a better pick when faced with viing merchandise offers as compared to those with a lower degree of cognition
Chen and Volpe ( 1998 ) stated that a individual ‘s degree of fiscal cognition tends to act upon their sentiments and impact their fiscal determinations and this concludes that a individual that have higher fiscal cognition more likely to do good fiscal determination. The writers besides found that college pupils did non hold sufficient fiscal cognition as they merely able to reply right merely 53 per centum of the inquiries associating to personal finances.. Avard et al. , ( 2005 ) found that merely 35 per centum of fiscal cognition inquiry answered right by college fresher. However, research done by Newton ( 1998 ) suggests that college pupils are cautious users of recognition cards and financially responsible.
Wanwanath and Jean ( 1994 ) look into recognition card use and cognition in Thailand by utilizing the method of telephone questioning to 300 cardholders in Bangkok. Consequence showed that recognition card holders in Thailand were deficiency of cognition in recognition card use. In add-on, they were more likely influencing by environmental stimulations and societal norms of Thai and this provide that Thai recognition card holders are less rational consumers that they seldom compare the costs and benefits of assorted cards and measure their picks before choosing a card.
Harmonizing to d’Astous and Miquelon ( 1991 ) , they stated that it is of import for recognition card users to take a suited recognition card and this requires knowledge of one ‘s recognition card use and comparing information on recognition card costs. It is found that the pupils who scored higher in the fiscal trial were less likely to have a recognition card and they tend to pay their balance in full each month compared with pupils who scored lower in their trial ( Cude et al. 2006 ) . Mandell ( 2004 ) noted that holding a nest egg history has been associated with higher nest eggs knowledge among high school pupils. Ironically, recognition cards users among this age group have been associated with lower recognition cognition.
Tan ( 2003 ) that did a survey on Oklahoma College Student Credit Card revealed that most of the pupils can pull off their debts good, but there was some of them had found themselves in a fiscal bind because the use of recognition cards. In add-on, there was grounds to bespeak the debt had really influenced their college life negatively for illustration those pupils that making portion clip occupation to pay off their credit-card debt indirectly do them hold less clip to be involved in school activities or programmes. Besides, this survey besides found the pupils that covering with credit-card debt jobs willing to go to utile plans related to fiscal duties and debt direction. The pupils besides believed that the college have the duty to educate them about the use of recognition cards such as the significance of recognition every bit good as the pros and cons of recognition card acceptance.
Richter and Prawitz ( 2010 ) found that the fiscal instruction did non impact the use of recognition cards among pupils as the fiscal instruction did non do the pupils to utilize the recognition cards less. Alternatively, they found that the pupils are the frequent users of recognition cards and most of them use for shopping. The writers concluded that fiscal instruction is of import to pupils before pupils acquiring the recognition cards and incurring debt. This findings supported by Bernheim et Al. ( 2001 ) who found grounds that fiscal instruction was correlated with higher rates of salvaging and higher cyberspace worth subsequently in life.
But, Robb and Sharpe ( 2009 ) that did a survey on consequence of personal fiscal cognition on college pupils ‘ recognition card behaviour found that pupils with higher degrees of fiscal cognition more likely to incur higher credit-card debt. This was support by Jones ( 2005 ) when he found that there were no important relationship between cognition and college pupil recognition card debt by utilizing a six-question graduated table to mensurate fiscal cognition Similarly, Borden et Al. ( 2008 ) stated that there are no important relationship between fiscal cognition and effectual or hazardous fiscal behaviours. And, Mandell ( 2006 ) besides concluded that fiscal instruction in high school did non assist in one ‘s fiscal behaviour.
O’Shaughnessy ( 2010 ) suggested that the pupils can utilize debit card alternatively of recognition cards as the solution for those who are covering with credit-card debt. The writer continues that pupils can non pass beyond what they have in their checking histories by utilizing debit cards and therefore they would non incur any debt.