Mediating Effect of Credit Card Usage on the Relationship Between Psychological Factors and Buying Behavior of Working Professionals in Nepal

Abstract

The rising use of credit cards has changed the buying behavior of consumers, especially those working professionals who have more exposure to formal financial institutions. In this context, this research aims to test the mediating role of credit card usage in the relationship between the psychological factors (power prestige, self-esteem, and risk-taking) on the purchasing behavior of working professionals in Nepal. The research design adopted is Quantitative Cross Sectional research design, where the data collection was done from 387 credit card users among the working professionals by means of a structured questionnaire using purposive sampling technique. The proposed model was tested using Partial Least Square Structural Equation Modeling (PLS-SEM). The results indicated that the psychological factors play significant role in determining the credit card usage behavior of individuals. Further, credit card usage also positively influences the buying behavior. From mediation analysis it was seen that credit card usage fully mediates the relationship between power prestige and buying behavior as well as self-esteem and buying behavior. While credit card usage only partially mediates the relationship between risk-taking and buying behavior. Finally, it was concluded that the psychological attributes influence the purchasing behavior of working professionals mainly through the mediation of credit card usage.