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Article

Nuradli Ridzwan Shah Mohd Dali, Shumaila Yousafzai and Hanifah Abdul Hamid

The main aim of this paper is to identify whether certain consumers behave irrationally when it comes to select banking products. This paper builds on one of the most…

Abstract

Purpose

The main aim of this paper is to identify whether certain consumers behave irrationally when it comes to select banking products. This paper builds on one of the most significant banking products that is the credit card.

Design/methodology/approach

This is an exploratory research paper. Therefore, only descriptive analysis on the differences between three credit card user groups such as the Islamic credit card users, conventional card users and users who decide to use both credit cards, conventional and Islamic, were presented.

Findings

The demographic and psychographic factors for the three different groups differ. In addition, there are four factors that influence the credit card selection. The factors are insurance/takaful provided by the credit issuers, cost associated with the credit card, the reward points programme offered and the convenience factors. Furthermore, the study found that three of the factors except insurance/takaful are significantly different between three credit card groups.

Research limitations/implications

This paper is limited to the context of Malaysia and the respondents are mostly from the same ethnic. Therefore, it could not be generalised in the context of other countries and further studies comparing different culture or ethnic could benefit and enrich the topic of study.

Practical implications

The Islamic and conventional banks could focus on several factors influencing customers’ selection and could focus to improve certain lacking areas as perceived by the consumers. The ability to increase the perceptions of the consumers regarding their credit cards will enable their products to be chosen in the market.

Originality/value

There was a significant amount of literature discussed in the Islamic banking selection factors. However, little attention being paid to the selection of a specific bank’s product. This study offers a study that looks into the selection of the credit card offered by the banks in respect to the irrational behaviours of the religious consumers in economic activities as compared to the conventional economists. This paper will contribute to the body of existing literature of banking selection.

Details

Journal of Islamic Marketing, vol. 6 no. 1
Type: Research Article
ISSN: 1759-0833

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Article

Hanudin Amin

The purpose of this paper is to explore factors influencing Malaysian bank customers to choose Islamic credit cards. The bank customers generally aware of Islamic credit

Abstract

Purpose

The purpose of this paper is to explore factors influencing Malaysian bank customers to choose Islamic credit cards. The bank customers generally aware of Islamic credit card facilities in Islamic banks but factors leading them to choose it are particularly unexplored. Given the importance of Islamic credit cards to Islamic banks, the study is aimed at explaining the effects of attitude, subjective norm and perceived financial cost on the Malaysian bank customers' behavioral intention to choose Islamic credit cards.

Design/methodology/approach

Drawing upon the theory of reasoned action (TRA), this study suggests a modified model to examine the acceptance factors of attitude, subjective norm and perceived financial cost within a context of Islamic credit cards. This paper extends partial least squares (PLS) to examine the impacts of these factors on the intention to choose Islamic credit cards. The model is tested using a survey data from 257 respondents.

Findings

The results reveal that attitude, subjective norm and perceived financial cost significantly influence the intention to choose Islamic credit card. Of these, attitude is first ranked as an influential factor in explaining one's intention to choose Islamic credit cards. All hypotheses are supported. The findings have proven the soundness of the TRA for study in the area of Islamic credit cards. Earlier works in Islamic credit cards have not ready to apply TRA in their works. The current research is thus closed the gap.

Research limitations/implications

Pertaining to research limitations, this paper reveals two limitations owing to their future directions for future research on Islamic credit cards. This study indicates that its contributions are particularly confined to potential users in Eastern-Malaysia whilst those from Western-Malaysia are largely untapped. Further research is required to include users from both geographies. Owing to time and financial constraints, this study is only analyzed three factors in explaining the behavioral intention to choose Islamic credit cards. Therefore, future studies in this area should examine new potential factors contributing the receptivity.

Practical implications

Findings generated from this study serve as a basis for more future works in the area of Islamic credit cards. The theory developed in the current study's model could also be generalized into other contexts of Islamic banking products and services. Practically, branch managers of Islamic banking institutions are of considerable importance to extend the findings of this study to better future planning of their Islamic credit card services.

Originality/value

This study extends the applicability of the TRA model into a newly context of Islamic credit cards. Empirically, this study also integrates the effect of perceived financial cost on the intention to choose Islamic credit cards. This study offers insights with respect to factors affecting one's decision to choose Islamic credit cards.

Details

Journal of Islamic Marketing, vol. 4 no. 3
Type: Research Article
ISSN: 1759-0833

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Article

Dariyoush Jamshidi and Nazimah Hussin

Understanding the important patronage factors of Islamic credit card as a new e-commerce banking service is essential for bankers and users. Although some previous studies…

Abstract

Purpose

Understanding the important patronage factors of Islamic credit card as a new e-commerce banking service is essential for bankers and users. Although some previous studies have focused on the factors that influence adoption of Islamic credit card, there are few empirical research studies that use a well-established adoption model that helps bankers and consumers to accept and use the Islamic credit card. This study aims to provide such a model to facilitate the adoption of Islamic credit card.

Design/methodology/approach

In response, a conceptual model was developed that combines the Technology Acceptance Model (TAM) with perceived religiosity (a new developed construct in this study) and trust to explain usage intention of this new banking product. Accordingly, the data were collected from 327 bank customers, and the results supported the applicability of TAM to describe usage behavior of Islamic credit card. Besides, the newly developed construct (perceived religiosity) increased the TAM power regarding explaining adoption of a new e-commerce banking service.

Findings

Theoretically, the results of this study advocate that perceived religiosity increase the TAM predictive power to clarify intention to use. While, perceived usefulness, perceived ease of use and attitude explained low level of the variance regarding intention to use, by adding perceived religiosity to TAM, these constructs contributed to an increase in the described variance, therefore offering a better explanatory power. In addition, the proposed joint TAM, perceived religiosity and trust explained 57.1 per cent of usage behavior variance. These results are of prime importance, as, to the best of the authors’ knowledge, this is the first study that proves the applicability of TAM for explaining adoption and usage of the Islamic credit card.

Originality/value

The findings of the current study showed that perceived usefulness is an important factor effecting people’s intention to use the Islamic credit card. Consequently, managers need to first ensure that the Islamic credit card and its services are technically sound and work in an appropriate manner. The focus should be on promoting speed, efficiency and effectiveness of this new product. In financial part, there is a need to reduce the interest rate in the long run to encourage potential users to consider the usage of the Islamic credit card and its offered services.

Details

Journal of Islamic Marketing, vol. 7 no. 4
Type: Research Article
ISSN: 1759-0833

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Article

Muhammad Ali, Syed Ali Raza and Chin-Hong Puah

This paper aims to investigate the factors affecting intentions to select Islamic credit cards in Pakistan by using the theory of reasoned action (TRA) model. In general…

Abstract

Purpose

This paper aims to investigate the factors affecting intentions to select Islamic credit cards in Pakistan by using the theory of reasoned action (TRA) model. In general, bank customers are 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 (SN) and attitude (ATT) with the inclusion of new construct, namely, perceived financial cost (PFC) to predict the intention of customers about the Islamic credit card in Pakistan.

Design/methodology/approach

Sample data were conveniently drawn from the bank customers with the help of a self-administered survey based questionnaire, which was consisted over five-point Likert scale. The study uses a sample of 492 bank customers located in the biggest city of Pakistan. Out of these responses, only 466 responses were used in the analysis, while the remaining responses were ignored due to missing data and incomplete responses. The data were analyzed through factor and regression analysis.

Findings

Findings from regression analysis suggest that SN and ATT show positive and significant impact on intentions to select an Islamic credit card, while PFC has a negative impact on intentions to select Islamic credit cards. Moreover, SN was found to be the most influential factor to predict the selection of Islamic credit card.

Research implications

This study has some practical implications for the academicians and Islamic bank managers. Through this research, bank managers can educate their customers about Islamic credit and financial products. Not only this, they should develop a strategy for the awareness of Islamic banking products through social networking and other marketing modes. On the other side, this study laid a foundation for future researchers to explore additional predictors of Islamic credit card. Their empirical work will provide a help to benefit and understand customers’ financial knowledge.

Originality/value

Islamic credit facility is entirely new in Pakistan and lacking with empirical support. Therefore, this investigation contributes to the existing body of knowledge by providing a comprehensive explanation on the Islamic credit card service in Pakistan.

Details

Journal of Islamic Marketing, vol. 8 no. 3
Type: Research Article
ISSN: 1759-0833

Keywords

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Article

Md. Mahmudul Alam, Yusnidah Binti Ibrahim and Jaka Sriyana

The credit card market is very large and segmented by targeting different types of consumers. One type of credit card is one that specifically targets people in the…

Abstract

Purpose

The credit card market is very large and segmented by targeting different types of consumers. One type of credit card is one that specifically targets people in the education sector, for instance, students, teachers and other staff members. This study aims to compare the features of education and other credit cards in Malaysia.

Design/methodology/approach

The study analyzes data concerning 234 credit cards by using descriptive statistics and a one-way analysis of variance test.

Findings

Out of 234 credit cards, this study found only two credit cards especially target education sector customers. The study evaluated 13 features of these credit cards and found that only 2 features are statistically significantly different from other conventional credit cards in Malaysia. These features are interest rate and cash withdrawal charge fees.

Originality/value

This is an original study based on the compilation of data from secondary sources. The findings will provide valuable insights to financial regulatory policymakers, academics and business managers.

Details

Society and Business Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5680

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Article

Hanudin Amin

The purpose of this paper is to analyze the probability of Islamic credit card usage intention among Islamic banks' customers. Financial cost, knowledge of Islamic credit

Abstract

Purpose

The purpose of this paper is to analyze the probability of Islamic credit card usage intention among Islamic banks' customers. Financial cost, knowledge of Islamic credit card, attitude, financial recommendation and demographic items were examined in order to determine whether these factors are influencing the Islamic credit card usage intention or not.

Design/methodology/approach

Drawing upon the theory of reasoned action (TRA), this study proposes a conceptual model to examine the factors determining the Islamic credit card usage intention. The research model is evaluated using survey data from 354 respondents with the help of a questionnaire.

Findings

The results reveal that “financial recommendation”, “knowledge on Islamic credit card”, “age (young)”, “marital status”, “religion” and “education level” are significantly affecting the Islamic credit card usage intention. The research also concludes that “attitude on Islamic credit card” appears to have no effect on the Islamic credit card usage intention.

Research limitations/implications

The research has two limitations. The limitations however provide support for future researches in the area of Islamic credit card. Despite the limitations, the study contributes to the body of academic knowledge by shedding more light onto the factors affecting Islamic credit card usage intention.

Practical implications

Insights reported from this study are of particular importance to bank managers, providing them with an improved understanding pertaining to the Malaysian bank customers' usage intentions for Islamic credit cards. The research helps them to better plan for Islamic credit card facilities, in order to cater for the financial needs of Malaysia bank customers.

Originality/value

The contribution of the research lies in achieving a more profound understanding of Malaysia bank customers' usage intentions for Islamic credit cards. The research manages to discover the factors which particularly determine the use of Islamic credit cards. It also expands the literature on Islamic credit cards.

Details

Management Research Review, vol. 35 no. 6
Type: Research Article
ISSN: 2040-8269

Keywords

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Article

Muhammad Bilal and Ahamed Kameel Mydin Meera

The purpose of this paper is to develop a new Islamic credit card model that is in line with Shariah principles and can be adopted as an alternative to contemporary…

Abstract

Purpose

The purpose of this paper is to develop a new Islamic credit card model that is in line with Shariah principles and can be adopted as an alternative to contemporary Islamic credit card models by Islamic financial institutions in Malaysia.

Design/methodology/approach

This paper is theoretical in nature and mainly based on descriptive research method approach.

Findings

The overall findings indicate that the contemporary practice of Islamic credit card in Malaysia is still controversial in its design and operation. Moreover, the adoption and practice of Shariah contracts in bay’ al-inah, tawarruq and ujrah models are not in line with fundamental doctrines of Shariah and are imbued with the practice of hilah (legal trick), which allows them to circumvent the prohibition of riba. The paper indicates that Al-Muqassah model possibly has a comparative advantage in design and operation when compared with the bay’ al-inah, tawarruq or ujrah models.

Research limitations/implications

The paper is limited to develop a new Shariah-compliant Islamic credit card model. The paper presents a design and defines the underlying Islamic financial contracts and their working mechanisms in the proposed model. However, it will not address other related areas like consumer perception, legal and regulatory requirements.

Practical implications

The paper will have direct implications on contemporary practice of Islamic credit card in Malaysia and elsewhere. The practice of Al-Muqassah model can also possibly have effects on common well-being and economic development.

Originality/value

The paper has relevance for Islamic financial institutions offering Islamic credit cards. The proposed model is fully in line with fundamental doctrines of Shariah and performs the key functions of an Islamic credit card.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 8 no. 4
Type: Research Article
ISSN: 1753-8394

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Article

Zaimy Johana Johan, Mohd Zainee Hussain, Rohani Mohd and Badrul Hisham Kamaruddin

The purpose of this paper is to examine the relationship between attitude, subjective norm, perceived behavioural control, religiosity, knowledge and Shariah-compliance…

Abstract

Purpose

The purpose of this paper is to examine the relationship between attitude, subjective norm, perceived behavioural control, religiosity, knowledge and Shariah-compliance with intention to hold Shariah-compliant credit card (SCCC) amongst Muslims and non-Muslims.

Design/methodology/approach

Researchers used survey questionnaire to collect data and applied a purposive sampling method, then analyzing the data using descriptive statistics and also multi-group analysis of SmartPLS.

Findings

For Muslims, attitude, subjective norm, Shariah-compliance, knowledge and religiosity are positively significant. While for non-Muslims, only attitude and subjective norm are positively significant to intention to hold SCCCs.

Research limitations/implications

The behavioural study only focusses on intention to hold Islamic credit cards, which is constraining the extended model of the theory of planned behaviour (TPB) without the actual performance of the behaviour, which is holding SCCCs. Secondly, the research caters for a single method, namely, quantitative without including the qualitative method to better understand and explore other factors affecting consumers’ behavioural intention. The qualitative part can be carried out by conducting interviews with practitioners, regulators and customers. Thirdly, the cultural dimensions are not combined as parts of TPBs’ antecedents for extended model that could be affecting intention, as Malaysia has diverse ethnic groups with different religious background.

Practical implications

In terms of managerial implications, the findings will further assist financial service providers to develop more effective marketing strategies for Islamic financial products not just to cater for the Muslims but also the non-Muslims, who are increasingly attracted to Islamic banking. As many Muslims are still holding conventional credit cards, it is timely for the Islamic financial institutions to attract them with the SCCCs.

Social implications

Financial marketers are expected to be qualified and well-versed on the different Islamic product structures and also the conventional products. By having such enables them to enlighten and create awareness amongst the targeted consumers in seeking Shariah-compliant financial-related products.

Originality/value

The research will contribute to new theoretical knowledge of an extended behavioural model in relation to customers’ perception towards SCCCs’ acceptance.

Details

Journal of Islamic Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0833

Keywords

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Article

Aster Mekonnen, Fiona Harris and Angus Laing

Cause‐related and affinity marketing are based on the assumption that linking a commercial organisation's product with a non‐profit organisation enhances the product's…

Abstract

Purpose

Cause‐related and affinity marketing are based on the assumption that linking a commercial organisation's product with a non‐profit organisation enhances the product's appeal and provides differentiation from rival offers. The purpose of this paper is to examine the efficacy of this premise.

Design/methodology/approach

In‐depth qualitative research was conducted to explore the construction of consumer value in affinity credit cards, followed by large‐scale quantitative research to assess the prevalence of the perceptions and behaviour patterns identified.

Findings

Linked products offer a range of individual and group benefits, both functional and symbolic. However, the value placed on these benefit categories varied according to the type of affinity group.

Research limitations/implications

Whilst encompassing a wide range of affinity categories, all of the affinity credit cards were issued by one financial services organisation. Variation is therefore possible between the benefits offered by other financial services organisations operating affinity schemes.

Practical implications

The findings demonstrate the need to identify the value perceived by different groups of consumers of affinity products and to tailor affinity products to the type of affinity organisation with which they are linked.

Originality/value

A key strength is the research's access to card holders from a wide spectrum of affinity categories. This has proved elusive in prior research. The paper challenges the assumption that linking a product to a non‐profit organisation enhances its appeal and provides a basis for differentiation. The efficacy of this premise depends on the type of cause or affinity group, with the value placed on benefit categories varying accordingly.

Details

European Journal of Marketing, vol. 42 no. 1/2
Type: Research Article
ISSN: 0309-0566

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Article

William A. Stadler

The purpose of this paper is to inform readers about pervasive “predatory lending” practices in the credit card industry and to explore the limitations of the…

Abstract

Purpose

The purpose of this paper is to inform readers about pervasive “predatory lending” practices in the credit card industry and to explore the limitations of the Congressional response to this problem.

Design/methodology/approach

National attention has been focused on illegal and unscrupulous behavior in the mortgage industry, but practices common to the credit card industry have been virtually ignored. This issue is explored through a description of the modus operandi of credit card lenders, details of regulator positions on predatory lending, and the recent Congressional response to this trend via The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009.

Findings

“Predatory lending” is a fraudulent practice that presents serious financial risks to consumers. Recent attempts to minimize those risks by Congressional statute may be inadequate. This paper identifies some of the limitations of those regulatory provisions to raise awareness of the issue.

Research limitations/implications

While the response to predatory lending has been well‐intentioned, lenders are constantly findings new ways to circumvent current law and regulations. As a result, research must continue to properly investigate and address the issue.

Practical implications

Exploration of credit card lending practices is relevant in the context of the current economic environment. Further, investigation of the prevalence and impact of “predatory lending,” as well as the recent Congressional response, are necessary to determine if enough is being done to stymie this problem and protect consumers from continued economic marginalization.

Originality/value

This paper provides current information relevant to the pervasive issue of predatory credit card lending in the USA.

Details

Journal of Financial Crime, vol. 19 no. 1
Type: Research Article
ISSN: 1359-0790

Keywords

1 – 10 of over 2000