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Research Paper | Economics | Kenya | Volume 5 Issue 6, June 2016

How Cost Influences Uptake of Credit Cards in Kenya

Caroline Achieng Otieno | Tobias Olweny

Abstract: There has been worldwide increase in the use of credit cards which are replacing currency as a method of payment. The objective of this study was to determine how cost influences the uptake of credit cards in Kenya. Descriptive survey design using questionnaires was adopted to collect data from selected credit card holders in five commercial banks operating in Nairobi County of Kenya. The study established that demographic factors such as age, marital status level of education and gross monthly income had strong positive correlation with cost variables in influencing uptake of credit cards, which was further explained through multiple regression model Y= 0+1X1+2X2+3X3+4X4+5X5+. Cost was a key determinant of credit card uptake and the card holders saw use of credit cards as a way of reducing the need to carry cash and also brought financial independence. Uptake of credit card was also due to high cost of living and majority of the respondents were not satisfied with the high interest rates charged on credit card debts. The study recommended campaigns geared towards encouraging use of credit cards and further studies on how specific individual demographic factors influence uptake of credit cards in the Kenyan market.

Keywords: Credit Card, Card Holder, Card Issuer, Cost

Edition: Volume 5 Issue 6, June 2016,

Pages: 373 - 378