Effects of Credit Card Incentives on Consumer Borrowing In Kenya: A Case of Commercial Banks in Kenya

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International Journal of Academic Research in Economics and Management Sciences


Financial institutions have mainly relied on incentive programs as their main strategic driver to increase electronic payments, such as through use of credit cards. Credit cards have been globally acclaimed for their benefits that range from their ability to ensure tax-compliance, security, instant cash and their ability to facilitate settlement of cross-border transactions. However, there exists a great challenge of credit card usage, such as ease of accumulation of debts and high interest charges. The purpose of this study was to determine the effect of credit card incentives on consumer borrowing in Kenya. The study employed a descriptive study approach using a sample size of 18 commercial banks offering credit card services. Selfadministered questionnaires were used to collect information. Credit card incentives were found to be a major contributor to credit card uptake. The study also found that most banks used incentives such as rewards for repeated use, low interest rates, traveling awards and benefits to influence the spending behavior of their clients. The study found credit card also affected spending behavior. It is concluded that credit card incentives can be effectively used by banks to increase use of credit cards. It is recommended that financial institutions should educated their customers on how to use their credit cards so that they do not fall into a debt trap.


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Incentives, Credit Cards, Consumer Spending, Consumer Borrowing, Consumer Indebtedness


Mwende, J., Wachira, M., & Amata, E. (2017). Effects of Credit Card Incentives on Consumer Borrowing In Kenya: A Case of Commercial Banks in Kenya. International Journal of Academic Resea