Skip to main content
SpringerLink
Log in

Credit card ownership and usage behaviour in Saudi Arabia: The impact of demographics and attitudes toward debt

  • Analysis Paper
  • Published:
Journal of Financial Services Marketing Aims and scope Submit manuscript

Abstract

Because of the Islamic prohibition of interest, in Saudi Arabia, there has long been a debate about the acceptability of owning and using credit cards. Available industry statistics, however, suggest that card ownership and usage may be on the rise. In this study, we empirically examine the extent and nature of credit card ownership and usage in the country, and how these are impacted by consumer demographics and attitudes toward debt. Using data from a structured survey, we find inter alia that credit card penetration in the country is relatively low, female Saudis are more likely than males to own the cards, card usage tends to be selective, attitude toward debt is a significant determinant of card ownership but not usage behaviour, and evaluation of card attributes is fairly positive among cardholders. Theoretical, managerial, and public policy implications of the findings are discussed.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1

Similar content being viewed by others

References

  • ‘Saudi Arabia: Credit card market: Card transactions total more than $328m’, International Market Insight Reports, New York, 2nd July, 1999, pp. 1.

  • Euromonitor International. (2006) ‘Financial cards in Saudi Arabia’, Executive Summary;http://www.euromonitor.com/reportsummary.aspx?folder=Financial_Cards_in_Saudi_Arabia&industryfolder=Financial_cards, Downloaded on 10th March, 2006.

  • Kaynak, E. and Harcar, T. (2001) ‘Consumer's attitudes and intentions towards credit card usage in an advanced developing country’, Journal of Financial Services Marketing, Vol. 6, No. 1, p. 24.

    Article  Google Scholar 

  • Chan, R. Y. -K. (1997) ‘Demographic and attitudinal difference between active and inactive credit cardholders — The case in Hong Kong’, International Journal of Bank Marketing, Vol. 15, No. 4, pp. 117–125.

    Article  Google Scholar 

  • Hogarth, J. M., Hilgert, M. A. and Kolodinsky, J. M. (2004) ‘Consumers' resolution of credit card problems and exit behaviours’, Journal of Services Marketing, Vol. 18, No. 1, pp. 19–34.

    Article  Google Scholar 

  • Metwally, M. M. (2003) ‘Attitudes of consumers in developing countries towards using credit cards’, Journal of International Marketing and Marketing Research, Vol. 28, No. 2, pp. 83–96.

    Google Scholar 

  • Abdul-Muhmin, A. G. (1998) ‘Demographic differences in usage and attitudes toward the Saudi Arabian EFTPoS system’, International Journal of Bank Marketing, Vol. 16, No. 3, pp. 117–128.

    Article  Google Scholar 

  • Lindley, J., Patricia, R. and Edward, S. (1989) ‘Credit card possession and use: Changes over time’, Journal of Economic and Business, Vol. 41, pp. 127–142.

    Article  Google Scholar 

  • Barker, T. and Sekerkaya, A. (1992) ‘Globalization of credit card usage’, International Journal of Bank Marketing, Vol. 10, No. 6, pp. 27–31.

    Article  Google Scholar 

  • Martell, T. and Fitts, R. (1981) ‘A quadratic discriminant analysis of bank credit card user characteristics’, Journal of Economics and Business, Vol. 33, pp. 153–159.

    Google Scholar 

  • Hirschman, E. (1982) ‘Consumer payment systems: The relationship of attribute structure to preference and usage’, Journal of Business, Vol. 55, pp. 531–545.

    Article  Google Scholar 

  • Chebat, J. C., Michel, L. and Helen, M. (1988) ‘A cross-cultural comparison of the attitudes towards and usage of Credit Cards’, International Journal of Bank Marketing, Vol. 6, No. 4, pp. 42–53.

    Article  Google Scholar 

  • Goldstucker, J. L. and Hirschman, E. C. (1977) ‘Bank credit card users: A new market segment for regional retailers’, MSU Business Topics, Vol. 25, No. 3, pp. 5–11.

    Google Scholar 

  • Heck, R. K. Z. (1987) ‘Differences in utilization behavior among types of credit card’, The Services Industries Journal, Vol. 7, No. 1, pp. 41–65.

    Article  Google Scholar 

  • Adelman, D. A. (2006) ‘Saudi Arabia: From banking to racing’, http://www.forbes.com/columnists/2006/02/14/saudi-arabia-banking-cx_daa_0215saudidiary.html, Downloaded on 10th March, 2006.

  • Slocum, J. W. and Mathews, H. L. (1970) ‘Social class and income as indicators of consumer credit behaviour’, Journal of Marketing, Vol. 34, No. 2, pp. 69–73.

    Article  Google Scholar 

  • Chien, Y. -W. and DeVaney, S. A. (2001) ‘The effects of credit attitude and socio-economic factors on credit card and installment debt’, The Journal of Consumer Affairs, Vol. 35, No. 1, pp. 162–179.

    Article  Google Scholar 

  • Hamilton, R. and Khan, M. (2001) ‘Revolving credit card holders: Who are they and how can they be identified?’, The Services Industries Journal, Vol. 21, No. 3, pp. 37–48.

    Article  Google Scholar 

  • Lee, J. and Kwon, K. -N. (2002) ‘Consumers' use of credit cards: Store credit card usage as an alternative payment and financing medium’, The Journal of Consumer Affairs, Vol. 36, No. 2, pp. 239–262.

    Article  Google Scholar 

  • Mathews, H. L. and Slocum Jr., J. W. (1969) ‘Social class and commercial bank credit card usage’, Journal of Marketing, Vol. 33 (January), pp. 71–78.

    Article  Google Scholar 

  • Martell, T. and Fitts, R. (1981) ‘A quadratic discriminant analysis of bank credit card user characteristics’, Journal of Economics and Business, Vol. 33, pp. 153–159.

    Google Scholar 

  • Meiden, A. and Davos, D. (1994) ‘Credit and charge cards selection criteria in Greece’, International Journal of Bank Marketing, Vol. 12, No. 2, pp. 36–44.

    Article  Google Scholar 

  • Durkin, T. A. (2000) ‘Credit cards: Use and consumer attitudes’, Federal Reserve Bulletin, Vol. 86 (September), pp. 623–634.

    Google Scholar 

  • Qi, M. and Yang, S. (2003) ‘Forecasting consumer credit card adoption: What can we learn about the utility function?’, International Journal of Forecasting, Vol. 19, No. 1, pp. 71–85.

    Article  Google Scholar 

  • Danes, S. M. and Hira, T. K. (1990) ‘Knowledge, beliefs, and practices in the use of credit cards’, Home Economics Research Journal, Vol. 18, pp. 223–235.

    Article  Google Scholar 

  • Choi, H. N. and DeVaney, S. (1995) ‘Factors associated with the use of bank and retail credit cards’, in MacKenzie, S.B. and Stayman, D.M. (eds) ‘Proceedings ofthe Society for Consumer Psychology’, American Psychological Association, La Jolla, CA, pp. 152–159.

  • Canner, G. B. and Luckett, C. A. (1992) ‘Developments in the pricing of credit card services’, Federal Reserve Bulletin', Vol. 78, pp. 652–666.

    Google Scholar 

  • Wasberg, C. A., Hira, T. K. and Fanslow, A. M. (1992) ‘Credit card usage and consumer debt of households’, Journal of Consumer Studies and Home economics, Vol. 16, pp. 19–32.

    Article  Google Scholar 

  • Zhu, L. Y. and Meeks, C. B. (1994) ‘Effects of low income families: Ability and willingness to use consumer credit on subsequent outstanding credit balances’, The Journal of Consumer Affairs, Vol. 28, No. 2, pp. 403–422.

    Article  Google Scholar 

  • Handelsman, M. and Munson, J. M. (1989) ‘Switching behaviours from credit card to cash payment among ethnically diverse retail consumers’, International Journal of Retailing, Vol. 4, No. 1, pp. 31–43.

    Google Scholar 

  • Ali Kara, E. and Kucukemiroglu, O. (1994) ‘Credit card development strategies for the youth market’, International Journal of Bank Marketing, Vol. 12, No. 6, pp. 30–36.

    Article  Google Scholar 

  • Zikmund, W. G. (2003) ‘Exploring Marketing Research’, 8th edn, South-Western, Mason, OH.

  • Abdul-Muhmin, A. G. (2003) ‘Barriers to online shopping by consumers in Saudi Arabia’, Proceedings of the Twelfth World Business Congress of the International Management Development Association, Vancouver, BC, Canada, 25th–29th June, 2003, pp. 226–231.

Download references

Acknowledgements

The findings reported in this paper are part of results from a larger study funded under the CIM Accreditation Fund grants of King Fahd University of Petroleum and Minerals (KFUPM), Dhahran, Saudi Arabia. The authors acknowledge KFUPM for the support, and for the use of its various facilities in the research and preparation of this manuscript.

Author information

Authors and Affiliations

  1. Department of Management & Marketing, King Fahd University of Petroleum & Minerals, Saudi Arabia

    Alhassan G Abdul-Muhmin & Yakubu A Umar

Authors
  1. Alhassan G Abdul-Muhmin
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Yakubu A Umar
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Alhassan G Abdul-Muhmin.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Abdul-Muhmin, A., Umar, Y. Credit card ownership and usage behaviour in Saudi Arabia: The impact of demographics and attitudes toward debt. J Financ Serv Mark 12, 219–234 (2007). https://doi.org/10.1057/palgrave.fsm.4760074

Download citation

  • Received:

  • Revised:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/palgrave.fsm.4760074

Keywords

Search

Navigation