Consumer Behavior Towards the Use of Credit Cards: The Empirical Evidence from Himachal Pradesh

The introduction of credit cards in India was the beginning of a new era which changed the face of the Indian economy completely. Kali Mody was the first businessman from India to introduce the Diners Club credit card in India in 1961, a year after it was initially made available globally. Later, the Central Bank of India issued the first bank credit card in 1980. But Andhra Bank was the one which aroused the public interest in credit cards with its Visa cards. To compete with the growing popularity of Visa cards, Vijaya Bank introduced MasterCard and became the first bank in India to do so. Even back then, it was not easy to qualify for a credit card in India unless your income lies within the annual minimum capacity. But, between 1988 and 1993, against the constraints, multiple PSU banks took the bold step of giving credit cards to many of their selected clients. As per the latest data released by Reserve Bank of India (RBI) the credit card spending has hit a fresh record of INR 1.4 trillion in May 2023, which has increased 5%, month on month this year, as of december 2024, India has more than 100 million active credit cards. As credit card usage grows in states like HP, understanding the complexities of consumer behaviour becomes critical for financial institutions and governments. The purpose of this study is to conduct an empirical investigation of the factors that influence customers' attitudes and actions around credit card usage in HP. The study aims to identify patterns, preferences distinct socioeconomic and cultural dynamics. The findings will not only add to academic literature, but will also help financial institutions, regulators, and companies modify their strategies and services to better match the changing requirements and expectations of credit card users in HP.