An investigation of the characteristics of credit card users and non-users in Nairobi, Kenya
Mbagi, Jane Wanjiku
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The purpose of this study was to investigate the extent to which credit cards are in use in Kenya. It also attempted to find out the level of consumer knowledge on credit card use. The study specifically sought to address the following objectives. 1. Establish characteristics of credit users and non-users 2. Identify factors that influence use of credit cards 3. Establish the level of consumer knowledge on credit card user 4. Find out problems encountered by credit card users and 5. Compare the credit card users and non-users in terms of education, income, age, family life circle stage and type of employer. The data used in the study was collected using questionnaires which were distributed by the research to a Random sample of 146 respondents in Nairobi's central division. A few interviews were carried out to verify the information collected using open-ended items in the questionnaire. The respondents were drawn from various ministries and private institutions. The data analyzed by use of frequencies, percentages and chi-squares. The results showed that the users and non-users had similar characteristics with 57% users and 66% of non-users being males. Majority were married, had small families that were in the expanding stage. A significant difference between the users and non-users was age, education level and income. About half (54%) of the credit card users were between 31-40 years while (43%) of non-users were between 20-30 years. Half of the non-users (50%) had university level of education. On monthly income, most (90%) credit users were earning above Ksh. 20,000 per month while one-third non-users (31%) were earning between Ksh. 10,000-15,000 per month. Two third (66%) of the respondents said they needed information about credit cards and there includes advantages and disadvantages of credit cards, rate of interest charged and when and how to use the credit cards. Convenience was reported as the main reason why credit cards are used by 80% of the respondents who use credits cards. Less that half (44%) of the non-users reported that they cannot afford to run a credit card as the reason why they do not use credit cards. Exposure to credit cards and monthly income remained as the main determinants of credit card users.