An empirical investigation of credit card users in China: Evidence from Shijiazhuang consumers

Abstract

Since the first credit card issued by the Bank of China in 1985, the domestic banks has issued 140 million credit cards in 2008, and by the end of 2009, the number of credit cards issued by the domestic banks reached 190 million, an increase of 30.37% compared to 2008. The domestic credit cards transaction totaled 2.1 trillion RMB in 2008, and this number reached 3.5 trillion RMB in 2009, an increase of 69.9% from 2008 (CIW Team Staff, 2012). At the end of 2011, domestic banks in China have issued 285 million credit cards (Peng, 2012). Today 30 percent of Chinese urban households own at least one credit card and the growth rate of credit card adoption has been an average of 40 percent per year between 2004 and 2009 (Hurst, 2012).

This study used binary logit and ordered logit models to identify and examine the factors influencing consumers’ use of credit card and the choice of different level of credit limit in China. More importantly this study identifies why consumers use and do not use credit card in China. The data is collect in Shijiazhuang city, the capital city of Hebei Provence.

Further, the finding shows consumers who are married and in the age group of 18 to 35 years old are the major credit card users.