IMPACT OF DEBIT AND CREDIT CARDS ON CONSUMER SPENDING

Abstract

Plastic money is an alternative to paper money or fixed money. The psychological motivation behind impulse spending via credit or debit cards is one of the main reasons people tend to spend more. Gary Kirk, consultant psychologist at Lighthouse Arabia, says, “The lack of payment is painful; People are less likely to fully evaluate an item before purchasing it, and thus more likely to engage in impulse buying. When we buy too much, we tend to focus less on our expenses and more on how much money we spend. When we spend money, we have the emotional pain associated with handing over our money and knowing for sure that we now have less in our wallet. With money, physical money exchange for goods is visible, tangible and immediate. In addition to the money left in our wallet, when using credit cards, balances are not immediately paid, which is another reason to spend more. The drawback of buying an item and solving a credit card bill further drives our connection between using a credit card and spending money. Robert (2001), in his study, used a simple modeling approach to examine the role of credit card usage and credit card usage in the American model of credit card usage and intentions for credit card use and compulsory buying among American college students. College students. The study found that monetary attitudes, power, confidentiality, distrust, and anxiety were highly correlated with compulsive buying and that credit cards often moderate these relationships. C. Prakash (2003), in his study, "The Impact of Credit Cards on Cost Systems", focuses on the impact of credit cards on cost systems to analyze the concept and the evolution of credit cards in India. Interview schedule was given to three hundred credit card holders. Simple percentage, F test, ANOVA and Chi-square test were used to analyze the collected data. Almost all respondents agreed that their purchasing power increased after they started using their credit cards regardless of their income level. Access to credit cards is limited to small companies such as airlines, jewelry stores, and restaurants. Therefore, this study has been done to find out the impact of debit cards and credit cards on consumer spending located primarily in Delhi NCR.