Effects of teaser rates on new credit card customers’ spending and borrowing: an empirical analysis

Kasaian, Keyvan; Murthi, B. P. S.; Steffes, Erin

doi:10.1108/ijbm-11-2021-0522

Cited by 4 publications

(6 citation statements)

References 63 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…This finding might happen because opportunistic customers who borrow using the promotion are more likely to borrow using regular avenues. This interpretation is consistent with the findings of Kasaian et al . (2022).…”

Section: Resultssupporting

confidence: 94%

Understanding the difference between opportunistic and needy customers’ borrowing behavior: a new approach to segment current credit card customers

Kasaian

Murthi

Steffes

2023

IJBM

Self Cite

View full text Add to dashboard Cite

PurposeThe authors offer a new approach to segment credit card customers by classifying customers into two unobserved (latent) segments: opportunistic and needy.Design/methodology/approachThe authors develop a finite mixture model to estimate customers’ tendency to borrow using the three alternatives available to them—promotional cash advances, regular cash advances and retail balances.FindingsThe results support the presence of at least two segments among credit card customers. The authors find that relative to opportunistic individuals, needy customers are typically more sensitive to interest rates. Additionally, the results indicate that offering promotional cash advances to current credit card customers increases their sensitivity to regular interest rates. Furthermore, the findings indicate that needy customers tend to have a higher stickiness in their debt. In the post-estimation analyses, the authors observe that needy customers generate more revenue than opportunistic customers. Interestingly, the bank does not perform well in targeting needy individuals and targets both groups with the same probability.Originality/valueThe authors argue that teaser rates attract at least two segments of borrowers—the “needy” segment, which is more likely to be cash-strapped, and the “opportunistic” segment, which looks at these teaser rates as an opportunity. However, banks do not observe segment membership. Hence, the authors offer a new approach to identifying these segments and show that understanding the behavior of these latent segments could help a bank target profitable customers more effectively.

show abstract

Section: Resultssupporting

confidence: 94%

Understanding the difference between opportunistic and needy customers’ borrowing behavior: a new approach to segment current credit card customers

Kasaian

Murthi

Steffes

2023

IJBM

Self Cite

View full text Add to dashboard Cite

show abstract

“…Las compras por impulso pueden afectar los ingresos personales y el endeudamiento, aunque esto no es necesariamente un impedimento para realizar compras no planificadas. Kasaian et al (2022) sostienen que este tipo de compras puede causar un uso imprudente de tarjetas de crédito y, en consecuencia, provocar el endeudamiento. En una investigación llevada a cabo con consumidores alemanes, se encontró que la tendencia a comprar compulsivamente, y luego endeudarse y derivar en una situación financiera problemática parece ser más un problema menos asociado al nivel de ingresos de los hogares y más vinculado con aspectos psicológicos (Achtziger et al, 2015).…”

Section: Otros Antecedentesunclassified

“…En una investigación llevada a cabo con consumidores alemanes, se encontró que la tendencia a comprar compulsivamente, y luego endeudarse y derivar en una situación financiera problemática parece ser más un problema menos asociado al nivel de ingresos de los hogares y más vinculado con aspectos psicológicos (Achtziger et al, 2015). Del mismo modo, se ha identificado que las recompensas promocionales asociadas a la tarjeta de crédito estimulan el gasto, derivando en mayor endeudamiento (Kasaian et al, 2022). Por ello, es posible suponer que: H4: Las compras de impulso realizadas con tarjeta de crédito en plataformas de comercio electrónico durante el Black Friday afectan la deuda en la tarjeta de crédito hasta doce meses después del evento; H4a: El atractivo de las promociones del Black Friday influye indirectamente sobre la deuda en la tarjeta de crédito hasta doce meses después del evento; H4b: La restricción presupuestaria durante el Black Friday influye indirectamente sobre la deuda en la tarjeta de crédito hasta doce meses después del evento; H4c: La disponibilidad de dinero durante el Black Friday influye indirectamente sobre la deuda en la tarjeta de crédito hasta doce meses después del evento.…”

Section: Otros Antecedentesunclassified

Efecto de tres estímulos económicos sobre la compra impulsiva en las rebajas de Black Friday: La deuda en la tarjeta de crédito y los problemas financieros en una ciudad mexicana

Cavazos‐Arroyo¹,

Lagunes-Pérez²,

Melchor-Ascencio³

2023

Inf. tecnol.

View full text Add to dashboard Cite

Esta investigación analiza el efecto de promociones, restricción presupuestaria, y disponibilidad del dinero sobre las compras por impulso realizadas en línea y con tarjeta de crédito durante los días de rebajas Black Friday en una ciudad mexicana. Se evalúan sus efectos en la deuda en la tarjeta de crédito, hasta doce meses después del evento, y se examinan los problemas financieros del consumidor. La metodología es cuantitativa, no experimental, transversal y explicativa. Se aplica una encuesta electrónica a 285 consumidores. El análisis se realiza a través de ecuaciones estructurales con mínimos cuadrados parciales [PLS-SEM]. Los resultados muestran que las promociones, la restricción presupuestaria y la disponibilidad de dinero influyen sobre las compras por impulso, afectando positivamente la deuda de la tarjeta de crédito; esta última también incrementó los problemas financieros. Se concluye que la restricción presupuestaria es la que más influyó en compras por impulso y que la deuda en la tarjeta de crédito influye fuertemente en los problemas financieros.

show abstract

“…, 2019; Roberts and Jones, 2001); and segments of credit card consumers (Ho et al. , 2021; Kasaian et al. , 2023).…”

Section: Literature Reviewmentioning

confidence: 99%

A comparative examination of the motivating factors underpinning consumers' loyalty toward credit card usage in the United States and France

Juusola,

Boakye,

Blankson

et al. 2023

IJBM

View full text Add to dashboard Cite

PurposeThis study aims to develop and validate a cross-national framework to identify the motivation underpinning consumers' (i.e. the general public's) loyalty toward credit card usage. The following research questions guided the study: (1) What factors motivate consumers to stay loyal to their credit card? (2) Does the investment model (regarding satisfaction and investment size) mediate the relationship between factors motivating consumers to stay loyal to their credit card?Design/methodology/approachThis study employs the investment model theory (Rusbult, 1980) as a theoretical framework and uses structural equation modeling to develop and validate a cross-national framework, addressing factors that motivate consumers to stay loyal to credit card brands. In addition, the authors test the mediating effect of the investment model on the relationship. Survey data were collected from the United States and France.FindingsThe findings revealed four factors (incentives, customer service, investment size and satisfaction) that impact consumer credit card loyalty behavior in the two mature credit card markets. The authors find empirical support for two of four hypotheses. That is, investment size mediates the relationship between incentives and consumer loyalty, and satisfaction mediates the relationship between customer service and consumer loyalty. Moreover, unlike the French sample, the American sample produced a significant finding for investment size to mediate the relationship between customer service and consumer loyalty.Originality/valueThis paper validates and extends the investment model theory in the marketing of credit cards within a cross-national setting. Most studies on credit card consumption focus on the college student segment, and there is less understanding of the motivation to stay loyal to using a credit card from the general public who are not necessarily college students. Given the scarce stream of empirical studies dealing with cross-national consumer motivation, choice criteria of credit cards, and loyalty toward credit cards, this research comes at an opportune moment as credit card firms differentiate their card brands in the global marketplace. Further, a dataset originating from two mature Western economies has been put forward for the benefit of practitioners and researchers.

show abstract

Effects of teaser rates on new credit card customers’ spending and borrowing: an empirical analysis

Cited by 4 publications

References 63 publications

Understanding the difference between opportunistic and needy customers’ borrowing behavior: a new approach to segment current credit card customers

Understanding the difference between opportunistic and needy customers’ borrowing behavior: a new approach to segment current credit card customers

Efecto de tres estímulos económicos sobre la compra impulsiva en las rebajas de Black Friday: La deuda en la tarjeta de crédito y los problemas financieros en una ciudad mexicana

A comparative examination of the motivating factors underpinning consumers' loyalty toward credit card usage in the United States and France

Contact Info

Product

Resources

About