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Factors affecting to select Islamic Credit Cards in Pakistan: The TRA Model

Author

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  • Ali, Muhammad
  • Raza, Syed Ali

Abstract

This study investigates the factors affecting intentions to select Islamic credit cards in Pakistan by employing the Theory of Reasoned Action (TRA) model. In general, bank customers generally aware of credit card facility, but the leading factors to select Islamic credit cards are particularly unexplored. Due to this fact, the study examined the effect of Subjective norm, Attitude and Perceived financial cost on the customers’ intention of Pakistani banks to select Islamic credit cards. The study uses a survey of 466 respondents. Exploratory factor analysis (EFA) and multiple regression were used to attain the study objectives. Findings from regression analysis suggest that subjective norms (SN) and attitudes (ATT) show positive and significant impact on intentions to select an Islamic credit card, while perceived financial cost (PFC) has a negative impact on intentions to select Islamic credit cards. On the other hand, subjective norms were found to be the most influential factor to predict the selection of an Islamic credit card. It is recommended that, Islamic bank should educate their customers about Islamic credit cards to compete with conventional credit cards and develop marketing strategies through social media and other marketing channels to change consumer’s attitude in favor of Islamic credit cards. The TRA model applicability extends into Islamic credit cards context while perceived financial cost is integrated on the intention to select Islamic credit cards. The present study also offers an insight view of one’s decision to select Islamic credit cards.

Suggested Citation

  • Ali, Muhammad & Raza, Syed Ali, 2015. "Factors affecting to select Islamic Credit Cards in Pakistan: The TRA Model," MPRA Paper 64037, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:64037
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    References listed on IDEAS

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    1. Syed Ali Raza & Nida Hanif, 2013. "Factors affecting internet banking adoption among internal and external customers: a case of Pakistan," International Journal of Electronic Finance, Inderscience Enterprises Ltd, vol. 7(1), pages 82-96.
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    6. Muhammad Hanif & Kiran Zafar, 2020. "Developments in Islamic Finance Literature: Evidence from Specialized Journals التطورات في أدبيات التمويل الإسلامي: أدلة من دوريات متخصصة," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 33(2), pages 3-23, July.
    7. Hassanudin Mohd Thas Thaker & Niviethan Rao Subramaniam & Abdul Qoyum & Hafezali Iqbal Hussain, 2023. "Cashless society, e‐wallets and continuous adoption," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 3349-3369, July.
    8. Muhammad Y. Khan & Shahab Ud Din & Majid J. Khan & Anam Javeed, 2021. "Dynamics of selecting Islamic home financing," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5005-5016, October.
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    11. Ali, Muhammad & Syed ali, Raza & Chin-Hong, Puah, 2015. "Factors affecting intention to use Islamic personal financing in Pakistan: Evidence from the modified TRA model," MPRA Paper 66023, University Library of Munich, Germany.
    12. Tariq Jalees, Nimra Shahid, Huma Tariq, 2015. "An Empirical Investigation on the Effect of Brand Loyalty," Journal of Management Sciences, Geist Science, Iqra University, Faculty of Business Administration, vol. 2(1), pages 166-184, March.
    13. Zulfikri Ab Talib & Yahya Don & Yaakob Daud & Arumugam Raman, 2015. "Organizational Culture and Organizational Commitment of Kedah District Education Officers," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 5(5), pages 410-419.
    14. Sandra Tibbs & Mark Green & Carol Wheeler & Megan Carmody-Bubb, 2015. "The Relationship between a Leader’s Authentic Leadership and Psychological Capital from the Followers’ Perspective," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 6(6), pages 304-315.
    15. Ali, Muhammad, 2015. "Bank profitability and its determinants in Pakistan: A panel data analysis after financial crisis," MPRA Paper 67987, University Library of Munich, Germany, revised 01 Nov 2015.
    16. Hatem Mohammed Rouhoma Salah & Nasser Habtoor, 2015. "Libyan Managers’s Perspective on the Intention to Retain Older Employees in the Corporate Sectors in Libya," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 6(6), pages 282-290.
    17. Muhammad Ali & Syed Ali Raza & Chin-Hong Puah & Mohd Zaini Abd Karim, 2017. "Islamic home financing in Pakistan: a SEM-based approach using modified TPB model," Housing Studies, Taylor & Francis Journals, vol. 32(8), pages 1156-1177, November.
    18. Igor Gomes Menezes & Antonio Virgilio Bittencourt Bastos & Victor Riccio Duran & Tainã Veloso & Kauê Almeida, 2015. "Organizational Commitment: Towards an Integrated Concept Linking the Attitudinal and Behavioral Approaches," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 6(4), pages 204-217.
    19. Raza, Syed Ali & Shah, Nida & Nisar, Wasay, 2019. "Consumer Buying Behavior of Organic Food with Respect to Health and Safety Concerns among Adolescents," MPRA Paper 93570, University Library of Munich, Germany.
    20. Jawaid Ahmed Qureshi & Sana Baqai & Muhammad Asif Qureshi, 2018. "Consumers' Attitude towards Usage of Debit and Credit Cards: Evidences from the Digital Economy of Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 8(5), pages 220-228.
    21. Peter Kwame Kuutol & Ebenezer Badu Agyemang, 2015. "Corporate Board Attributes And Agency Cost: Evidence From Listed Companies In Ghana," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 4(2), pages 86-96.

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    More about this item

    Keywords

    Islamic finance; Islamic credit cards; Islamic banks; Sharia;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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