The Effect on Personal Finances Due to Irresponsible Use of Credit Cards and Compulsive Buying Behavior

The consumer culture has been gripping India and easy access to credit facility is one of the causes of overspending. This overspending many a time is the reason for the mismanagement of the personal finances and thus creates pressure on investment management of individuals. The primary objective of this study is to investigate the effect of irresponsible use of credit card on compulsive buying among Indian consumers on their personal finances. A survey was conducted to collect the needed data in the cities of Delhi and Hyderabad. A Sample of 250 shoppers in the shopping malls like Shoppers’ Stop, Lifestyle, Food World, Q-mart and other retail stores was selected for the study. After a detailed literature survey, the hypotheses were developed. Scientific scale to measure the compulsive buying behavior among Indian consumers was used. To measure the irresponsible use of credit card, another scale was used which was pre-tested using a pilot survey. The discriminant analysis using the primary data reveals that use of credit card is the significant variable that is associated most closely with compulsive buying behavior followed by anxiety attitude, income and power and prestige attitude in that order. The outcome suggests that irresponsible use of credit cards facilitates the compulsive buying behavior that ultimately is the cause for the mismanagement of personal finances.