The impact of Lebanese life factors on credit card spending : the case of CSCBank SAL

Abstract

Purpose: This research attempts to analyze the impact of demographic factors and card ownership characteristics of Lebanese people on credit spending, and to investigate how total spending varies with respect to the selected variables. Design/methodology/approach: Deductive and quantitative in nature, this study relies on a sample of 2,169 cardholders over a period of sixteen years (2000-2016), and tests nine research hypotheses relating demographic factors and card owner ship characteristics to total spending per client “TSC”. Findings: The findings show that gender, income, settlement method, card ownership duration, and credit card limit are determinants of the extent of TSC with the ‘age’ exhibiting a negative linear association with spending. There are also indications of significant variations of TSC with respect to ‘marital status’, employment status’, and ‘income brackets’. Practical implications: These findings provide valuable insight and support for both policy and decision making with respect to cardholders’ attributes and characteristics, hence allowing financial institutions to target the appropriate clientele base, improve operations, and consequently render their credit practices more profitable. Originality/value: Comprehensive in scope, this paper provides a far-reaching assessment of the potential explanatory proxies of TSC. Comparable studies of the impact of demographic factors and card ownership characteristics on credit card spending were generally based on survey questionnaires and smaller sample sizes. This study uses archival data instead and a comprehensive sample allowing generalization to the whole Lebanese market.