This chapter of research intends to provide relevant information regarding the issues and concerns that serve as the primary focus of the study. The following parts will be discussed: background of the study, objectives of the study, significance of the study, limitations of the study, definition of terms, and structure of the research.
Background of the Study
Credit cards have enjoyed a steady increase in the demand from several populations over the world and the most prominent of which is that of the American nation (Tromble 1998). The number of households that possess and utilize money in the form of plastics have increased over a trend of years as well as the group who carried a balance with their credit card (Getter 2008).
These groups which are often seen to be a great target to which the marketing campaign of the credit card companies are that of the people who are likely to be at risk for indebtedness, which mostly centers on the impulsiveness of students for buying.
Recent issues with regard to the use and availment of credit cards have also surged as the security of it and the ethical and non financial costs start to beset the clients and the service providers.
In the United Arab Emirates, there are several banking institutions that compete in the provision of credit card. Just the same, common problems associated with the use of credit cards are also faced together with the behavior and perceptions of the consumers.
Credit cards are one of the most influential products in the banking business. As the world of banking is facing difficulties, mainly due to the sub prime credit issues, more attention is brought upon improving the marketing of this product to support efforts of recovery. There are associated social problems with the credit cards that include “rampant consumerism, escalating indebtedness, pervasive fraud and crime, invasions of privacy, dehumanization of our daily lives, and increasing homogenization of the world’s cultures” (Ritzer 2001: 71).
In this research, however, the focus is placed on the area of marketing the credit cards to students. This research deals primarily with the consumers suffering from serious depression because of credit card debt and the real price of credit cards to college students in particular.
There is a relationship between the willingness of customers to apply for a credit card and their perspective on hidden charges imposed by NIB.
Most of the people who avail of credit cards with NIB are able to pay on time as can be assessed from the credit history of selected customers.
Most consumers associate problems and difficulties with the use of credit cards.
Most consumers perceive the services rendered by NIB for credit cards to be noncompetitive as compared to other credit card services offered from other banks.
The perspectives of customers with regard to the use of credit cards in UAE are related to the importance they place over it.
The religion of the customers is related to their willingness to pay interest.
Most of the credit card application is being rejected because of strict bank policies.
Aims and Objectives of the Research
The objective of this research is to identify issues that hamper or disrupt the process of marketing credit cards in selected markets. The challenge of marketing credit card products is the fact that credit card is a product of the bank which is hard to sell. The situation suggests that credit card providers must add more attractive features. For this reasons, the objectives of the study are as following:
To evaluate the benefits of credit cards as the most influential product in the banking business;
To explore the challenges or difficulties that credit cards company encounter in selling the ‘hard to sell’ credit card products;
To assess the important of having a credit card that increases the demand for the product;
To identify the underlying reasons why people are not interested in credit cards in terms of unfulfilled customers’ needs; and
To suggest the strategy that credit card companies can take in offering their products to customers.
Significance of Study
The results and findings of this study will be of great help to bank in placing a greater sense of focus on the actual problem and make corresponding solutions. Primarily, this serves as a guide for the bankers in making corresponding actions with regard to the problems they are facing regarding credit cards. Moreover, it generally aims to provide information for the consumers, more specially the students, of the trends and problems associated with the said product. Likewise, it will add to the existing body of knowledge regarding credit card marketing.
The behavior of consumers and the current economic situations has brought them to rely less on acquiring a debt through the use of credit cards (Cummins 2008). In a report of the Bureau of Statistics, credit card debt has the slowest pace of growth with the card balance at $3138 on the average for the month of July (Cummins 2008). Likewise, the rampant cases of credit card fraud have led to become a factor that is of great concern to the industry (Duffy 2008).
With regard to that of the students, there are costs that need to be identified together with the use of credit cards and this is not limited to the financial costs that are identified for the said group. The information that will be provided will give way to a more informed judgment on the use of credit cards especially on the areas which are not given much focus on research.
The associated non-financial costs for the use of credit cards include problems of “rampant consumerism, escalating indebtedness, pervasive fraud and crime, invasions of privacy, dehumanization of our daily lives, and increasing homogenization of the world’s cultures” (Ritzer 2001: 71). There are also associated psychological conditions that arise with the use of the credit card due to the worries and indebtedness that occurs.
Likewise, there are already correlations that have been made between the levels of stress that is experienced by a person due to the debt they incurred (Seaward 2005). In addition to this, concerns with regard to the marketing of the banking industry for the credit card as a product have made a certain dilemma and responsibility that is to be faced by the marketers (Seaward 2005). The marketing strategy that is currently being used is seen to be deceptive in purpose (Howard 2005).
Lastly, it is with much hope that the findings of this study will contribute to the relevant policies that are made regarding the dynamics of credit card.