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Impulsive Buying Behaviour – ATM Card Use and Savings

Relationship between ATM Card Use and Savings on Impulsive Buying Behaviour


This study is on the relationship between ATM card use and savings behavior on impulsive buying behaviour. 162 participants comprising 94 males and 68 females, age range 17 to 32 years, mean of age 23.80, standard deviation 2.86, selected through convenient sampling of Continuing Education Programme (CEP) Students of Education Foundation English and Psychology Departments of Nnamdi Azikwe University Awka. Participants response were obtained on ATM credit card use scale, applying saving seals and impulsions buying behaviour scale respectively. Correlation design and Pearson product moment correlation coefficient statistics were used to analyze the data. Findings revealed that mean score of 32.30 and standard deviation of 6.94, for ATM credit card use and mean score of 20.79 and standard deviation of 5.71 for impulsive buying behaviour had significant positive correlation (r(0.34, P <.000); mean score of 23.28 and standard deviation of 4.06 for savings behavior and mean score of 20.79 and standard deviation of 5.71 for impulsive buying behaviour had no significant correlation ( r( .09.p >.05). Based on the findings, it was recommended that students should monitor their predispositions so as to contain their impulsive buying behaviours



This study will focus on the relationship between ATM card use and savings on impulsive buying behaviour among students of Nnamdi Azikiwe University (UNIZIK).

A credit card such as ATM card allows you to pay for sales or services by borrowing against your line of credit with the credit card company and to make monthly payment on the outstanding balance. Credit cards come in handy for emergencies as well as for many things that we will probably regret later. If you are like most people your are not exactly using cash to pay your way through college (www.studentplatinum.com). The fastest way to get into credit card debt is to ignore your own financial situation. It is easy to push financial problems abide but things do not get better on their own and debts left unexposed unattended faster into monsters guaranteed to creep up on you later. The American Bankruptcy institute reveals that 20% of the people who filed for bankruptcy in 2007 were college students. That is worth restating. The report further revealed that out of every 5 people declaring bankruptcy one is a college student (www.studentplalinum.com). Credit cards are also a convenient transactions medium in many situations (Evans, David 7 Richard Schmalensee, 2000) modern communications media have made it possible to order merchandise by telephone or over the internet. However it is largely impossible to transmit cash or cheques by these media. If you had to send a cheque by mail every time you ordered something over the phone, you transaction would be no faster than if you ordered by mail. By giving your credit card number over the phone, the merchant need not wait for your cheque and can send the merchandise immediately. A second advantage of a credit card as a payments medium, is that merchants can easily recognize and authenticate the card. If a customer presents a cheque in payment, the merchant must worry about whether or not the customer actually has sufficient funds in his/her cheque account to complete the payment. For frequent customers and local banks, it is not too difficult to build sufficient trust between merchant and customers to allow cheques to work well. But many merchants are reluctant to take out-of-town cheques because of the difficulty of tracking down customers whose cheque are returned by the bank. In order to promote the widespread acceptance of credit cards, the issuing banks guarantee payment to the merchant as long as he or she follows the procedures established for transaction approval. Before computer networks, this meant checking the customers signature against the one on the card and looking up the card number in a book of invalid card numbers (stolen cards, closed accounts, non-paying customers, etc). Now approval happens in seconds by computer link. Because the merchant is guaranteed payment on any approved transaction, accepting a credit card is less risky them accepting a cheque from a customer whose creditworthiness is unknown (Evans, et al, 2000). Unsecured lending was risker for banks than secured lending, so some banks were reluctant to enter the credit card market. However, once banks learned more about the risks and potential profits, credit–card lending took off. Banks have found ways to manage the risk of their portfolios of credit card lending. For consumers, credit card lending has provided an unprecedented degree of flexibility in the short-run timing of purchases. With a credit card account, you can hire a repair person to fix your furnace in mid-January even if you would not have cash to pay for it until payday arrives at the end of the month. You do not have to apply for credit from the repairperson or anyone else-all the credit terms are arranged in advance through the credit card agreement. You can even spread the payment over several months or longer if you are willing to pay interest at a fairly high rate. Department of Financial Institutions, consumer Credit Division, Indians, outlined the advantages of using a credit card as follows. (1) They allow you to make purchases on credit without carrying around a lot of cash. (2)They allow accurate record-keeping by consolidating purchases into a single statement. (3) They allow convenient ordering by mail or phone (4) They allow you to pay for large purchase in small, monthly installments (5) Under certain circumstances, they allow you to withhold payment for merchandise which proves deflective. Evans, et al (2000) stated that needy access to credit cards gives consumers a very convenient tool for timing their payments, but it may also give them the opportunity so far into debt that they have trouble catching up. If all consumers were ell enough informed of credit card borrowing as they made purchases, then the only people who would get into troubles with excessive debt  would be those who close to. They might decide that future credit problems are worth it either because they intend to default (and thus commit fraud) or because they peace a tremendously high value on having the goods immediately that they purchase with their cards. However, consumers may get into credit problems unwillingly if they do not fully realize how difficult it could lead them. Consumer credit Division, Department of Financial Institutions. Indiana outlined the disadvantages of using a credit card as follows:

  1. The ease of using credit cards, combined with impulsive buying may result in over-spending.
  2. High interest rates, as well as other costs make credit cards a relatively expensive method of obtaining credit
  3. Lost or stolen cards may result in some expense and inconvenience
  4. The use of multi-credit cards can get you even further into debt
  5. Fraudulent or unauthorized charges may take months to dispute, investigate and resolve.

Savings is extensively regarded as a key factor for promoting long-run economic growth (Aghion et al. 2006). It has been observed that individuals are responsible for their own financial security. Prawitz et al, (2006) found that millions of people struggle financially; and many of those near retirement lack the funds needed for comfortable life. Nowadays economically, life is tougher, workers face higher food prices, energy costs, and health care expenses. Deficient emergency savings increased anxiety among moderate and low-income households (Cho, 2009). The personal saving rate has declined over times, and consumers expressed concern about the adequacy of their savings. The Pew Research Centre (2007) reported that 77% of Americans always try to save; however 63% responded they do not save enough. In another study, Hurd and Zissimepoulos (2000) reported that 73% of respondents saved too little within the past 20 to 30 year. Sixty-eight percent of workers evaluated their saving rate as too low (Ch0, 2009). Low saving leads to health problems especially among low income households. Overuse of credit, overspending, lack of budgeting, too many debts, inadequate shopping and spending skills, how salary and lack of knowledge about money are the main causes of employee financial problems (Delfrooz & Hj Paim, 2011). Tracy (2002) stated that financial freedom comes to people who save 10 percent or more of their income throughout their lifetime. One of the smartest things that you can ever do for yourself is to develop the habit of saving part of your salary, every single pay-cheque. Individuals, families, and even societies are stable and prosperous to the degree to which they have high savings rates. Savings today are what guarantee the security and the possibilities of tomorrow. Tracy (2002) argued that one has to begin today to save 10 percent of the income off the top, and never touch it. This is your fund for long-term financial accumulation and you should never use it for any reason except to assure you financial future. It is sad but time, but if you simply save for a rainy day¸ you can be sure that it is going to start raining very soon. If you save with the intention of spending the money as soon as you need it, you are going to need it sooner than you realize. The remarkable thing is that when you pay yourself first and force yourself to live on the other 90 percent, you will soon become accustomed to it you are creature of habit. When you regularly put away 10 percent of your income, you will become comfortable living on the other 90 percent. Many people start by saving 10 percent of their income and then graduate to saving 15 percent, 20 percent, and even more. And their financial lives change dramatically as a result. Because of high and even multiple tax rates, money that is saved or invested without being taxed accumulates at a rate of 30 to 40 percent faster than money that is subject to taxation. If you are in debt and 10 percent is too much for you, start by saving I percent of your income and living on the other 99 percent. When you become comfortable living on 99 percent of your income, increase your savings rate to 2 percent. Overtime, work the ratio up to 10, 15 and even 20 percent of your income. Become a lifelong student of money know what  you are doing so you can always make intelligent decisions when you invest your funds (Tracy, 2002) it is important for you to start accumulating money no matter what your situation. Put first a few coins into a piggy bank. Begin saving even a small amount of money. That money, magnetized by your emotions of desire and hope, will begin to attract more to you faster than you can image. John .D Rockefeller started working as a clerk earning & 3.75 per week from this amount, he gave half to his church and saved fifty cents. It was not much, but saved fifty cents. It was not much, but it was a beginning. By the time he was fifty, he was perhaps the richest man in the world. Throughout his career, he attracted opportunity after opportunity until he virtually dominated the production and distribution of oil and fuel in the United States. And he started by saving fifty cents a week (Tracy 2002).

Consumers purchase goods and services to meet their needs, but it is not the only reason (Alagoz 7 Ekici, 2011). Shopping habits also affect the consumers purchasing behaviour (Erkmen & Yuksel, 2008). As the times goes by, shopping habit of the consumer generate a decision making style. In studies, it is determined that consumers have a decision making style and that guide consumers to decide while making choices to purchase (Unal & Ercis, 2006). Some consumers makes an exact decision according to their made in advance, and some of them behave without a plan or decision, just with the instinct (Erkmen & Yuksel, 2008). Impulse purchasing is a common phenomenon which exposes serious results in United States (Zhank & Shrum, 2009). Many studies underline that, impulse purchasing took a part in American consumers lives and became a characteristic (Rook, 1987), impulse purchasing also takes place in many societies. Charosh, Halimi, and Namdar (2011) stated that several studies have been conducted regarding consumer decision making. Consumers make an effort to have sensible reasons when they intend to select one choice from a collection of options (Shfir Simonson, & Tversky, 1993). Although sometimes consumers do not decide rationally when they want to do some purchases. This happens when there is no adequate information about the product and when there is no prior intention to buy (Tversky & Kahneman, 1981). Therefore impulse buying may happen, impulse purchasing is a fast pace decision and there is a short time between observing the product and buying it. It does not engage reflection and it takes place without great amount of evaluation (Jones, Reynolds, Wean, & Sharon (2003b). Rook and Hoch (1985) study, there are five important phases which identify impulsive buying behaviour from non-impulsive buying behaviour. These phases include:

  1. Sense of an unexpected and unplanned intention to take action. This phase refers to attracting consumers attention by incentives which are offered by seekers which encourage them to have desire to purchase
  2. Being in a state of psychological imbalance. This phase takes place while customers fail their self-control for the time being
  3. Being in situation of psychological conflict. During this phase, psychological conflict takes place while consumers try to get their self-control back. Therefore, they assess the instant positive single of their shopping rather than unpleasant side of it
  4. Eliminating cognitive evaluation. This phase is referred to as a situation in which the customers rationality is damage. It occurs while customer looses his/her rationality incentives and then starts to make a decision with lack of adequate thinking
  5. Consuming with no consideration about the consequence this phase takes place whom a customer desires to select a will but immediate reward rather than a great reward which needs more waiting.

Rook (1987) suggested that impulsive buying takes place when a consumer experiences a sudden often persistent urge to buy something immediately. The impulse to buy is he domically complex and also may stimulates emotional conflict. Also impulsive buying is prone to occur with diminished regard for it consequences. Piron (1991) study stated that non of the definitions of impulse purchasing complicated this interesting and complicated phenomenon. But Colman (2003) defined impulse control as a form of disorder characterized by a failure to resist impulses, drives, or temptations to behave in ways that are damaging to self of other. This is however closely related to compulsive behaviour  which is a repetitive pattern of behaviour, such as hand washing tidying or checking or mental activity such as praying coming, reciting words or phrases silently that a person feels compelled to perform following strict rules or rituals, with the aim of receiving anxiety or avoiding some dreaded outcome, the behaviour or mental activity being either clearly excessive or not realistically capable of achieving its desired objective and being recognized as such by the person concerned. Based on the believe that highly impulsive individual could definitely find it difficult to cope with relevant personal planned activities such as saving behaviour and effective ATM credit use; then this  study. This then seeks to ascertain the relationship between ATM credit card use and savings on impulsive buying behaviour among students.

Statement of the Problem 

Prior to students enrolment into higher institutions, not much is known about ATM credit card use and possibly its consequences. Most of such needs are taken care of by their parents or guardians. There may be occasions where mini credit facility may be arranged with reputable merchants, even at that what mind set do students use in embracing it? It is obvious that the gains of effective use of credit cards by students will go a long way to ease their timely completion of their educational pursuit, but the irony of it all is that students with ease of using credit cards combined with impulsive buying behaviour may result in over spending.

It has been observed that individuals are responsible for their own financial security. Money saved in the bank or with the individual can only be there if the discipline and control is there. There has been decline on personal saving. The fact is that if students fail to imbibe on saving culture, in the long run ambacking on emergency saving could increase their level of anxiety. If has been found that financial freedom comes to people who save 10 percent or more of their income throughout their lifetime. It is through that there could be other reasons that could counter the prosperity to save but ideally, many had admitted responsible for their poor saving culture.

Solomon (2004) in a study found 85 percent of chewing gum and candy sales, 70 percent of cosmetic sales, 75 percent of oral health products come time by impulsive shopping. Examining this critically one will realize that most times they are not planned purchases. For impulsive individuals more items of value may be included and thereby swell their planned purchases. Taking cognizance of this development the need has arisen to examine the relationship between ATM credit card use, and savings on impulsive buying behaviour of students.

Purpose of the Study    

First, the study seeks to determine the relationship ATM credit card use and savings have on impulsive buying behaviour.

Again, the study is intended to be a contribution to the body of knowledge as a result of the fact that literature linking savings behaviour and impulsive buying behaviour were relatively few.

Finally, as impulsive buying behaviours has continued to pose serious problem, students, are then to make effort or management strategies.

Research Questions 

  1. Will ATM card use have any relationship with impulsive buying behaviour?
  2. Will savings behavior have any relationship with impulsive buying behaviour of students?

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