The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 1, January 2016
The Characteristics of using Credit Card
Affecting to the Causes of Bad Debt of
People in Bangkok Metropolitan Region
Mukda Kowhakul*
*Rangsit University, Pathumthani, THAILAND. E-Mail: mukda.k{at}rsu{dot}ac{dot}th
Abstract—Previous studies have focused on distress of credit use. However, many people in Thailand have
used credit cards, and cannot pay off credit card debt. The objectives of this study were to investigate the
personal factors and the characteristics of using credit cards which affect the cause of bad debt. The study was
a research survey that used questionnaires to collect data from 400 samples of credit card holders from the
Bangkok Metropolitan Region. From the study, the samples which responded to the questionnaire shared the
following characteristics: There were females, age between 29-30 years old, single status, master degree of
education; most of them are employees in private companies which have 1-2 credit card holders in amount of
50,000 baht limit. They use credit cards for spending on consumers goods, at less than 5,000 baht per time.
Keywords—Bad Debt; Bangkok; Bangkok Metropolitan; Characteristics of using Credit Card; Credit Card;
People in Bangkok; Using Credit Card.
Abbreviations—Bad Debt (BD); Bangkok Metropolitan (BKK); Credit Card (CRC).
I.
N
INTRODUCTION
OWADAYS, credit cards have become a major
instrument for carrying out and financing purchases
in our society [Beckman & Foster, 2]. Credit cards
have revolutionized consumer spending habits and changed
the face of business. In today’s economy, credit cards
represent an important part of household, business, and global
activity. Furthermore, most of commercial banks have market
competition and they have many strategies to lure customers
inclusive of various services, high development technology to
ensure the customer convenience, using electronics for
business transactions, as well as, the credit card transaction
[Kowhakul, 13]. Therefore, the credit card performs a very
important function in today’s world. Credit cards make life
easier and they are not only important for individuals and
businesses -- but they’re an important aspect of continued
economic growth. For individuals, credit cards are an
important part of everyday life. Increased borrowing on credit
cards to finance consumption is usually seen as a stimulating
factor for the economy.
However, even though credit cards have many uses -they can be dangerous tools if used haphazardly and without
responsibility. Credit card debt is a serious problem for many
individuals and families. Many individuals do not know how
credit cards work before they use them. Credit cards can
cause long term damage to financial health [Brigham &
Ehrhardt, 4]. While there may be a negative stigma attached
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to credit cards, if used with responsibility they can be
advantageous in many ways. Credit cards require discipline
to yield positive results -- involving debt or bad credit
[Chapin & Hasset, 5]. There are many who lack the discipline
needed to use credit cards as proper tools. Racking up debt
and worrying about it later seems to be the trend. The Bank
of Thailand (BOT) Analysis reveals that the number of NPL
(Non Performing Loan) from credit card holders is on the
increase; hence, BOT will seek the various means for
reducing NPL.
Therefore, this research will investigate the
characteristics of using credit card which affect to the causes
of bad debt in order that the financial institutions will have
the means for reducing bad debt and have guidance in
selecting the customers in the matter of accepting credit card
risk. Another goal involves the response to the question of
how to use the credit card in right ways and effectively.
II.
RELATED WORKS
The related works of this study are as follows:
2.1. Objectives
The purpose of this study are
 To study the personal factors which affect to the
causes of bad debt.
 To study the characteristics of using credit cards
which affect to the cause of bad debt.
© 2016 | Published by The Standard International Journals (The SIJ)
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 1, January 2016
2.2. Scope of the Study
2.4. Framework of the Study
The scope of study for this research paper are
 Content: To study the personal factors such as
gender, age, status, occupation, education, and
income, studying the characteristics of using credit
cards such as types of credit cards, amount of credit
card, line of credit card, types of using credit card,
frequency of credit card, place of using credit card
and amount expended of credit card.
 Population: The population of this research is credit
card holder from Bangkok Metropolitan Region :
Nakorn Prathom, Nonthaburi, Prathumtani and
Samutprakarn. The comprehensive samples are to be
provided in amount of 400 samples
The conceptual framework of this study was designed such
that the independent variables and dependent variables as
follows:
 Independent variables
- The demographic factors - the nature of the
personal factors : gender, age, status, occupation,
education and income
- The characteristics of using credit card : types of
credit cards, amount of credit card, line of credit
card, types of using credit card, frequency of
using credit card, location of using credit card
and amount expended of credit card
 Dependent variables: the causes of bad debt are
- financial problem
- unpaid debt problem
- increase in personal debt problem
- decrease in paying debt problem
- interest rate problem.
2.3. Hypothesis of the Study
This study attempts to examine the following research
questions:
 The difference in personal factors have significance
in causing of bad debt.
 The difference in characteristics of using credit cards
have significance in causing of bad debt.
Dependent variables
Independent variables
The personal factors:
- gender
- age
- status
- occupation
- education
- income
The causes of bad debt:
- financial problem
- unpaid debt problem
- increase in personal debt problem
- decrease in paying debt problem
- interest rate problem.
The characteristics of using credit card :
- types of credit card
- amount of credit card
- line of credit card
- types of using credit card
- frequency of using credit card
- place of using credit card
- amount expended of credit card
Figure 1: Framework of the Study
III.
RESEARCH METHODOLOGY
The materials and research methodology used in this study
are the following:
3.1. Types of Research
The research is a quantitative measurement effected by
surveying and collecting data from a questionnaire [Hill &
Alexander, 12]. The statistics of this paper include frequency,
percentage, average, standard deviation, and hypothesis
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testing by the T-test, F-test which were applied to analyze the
data.
3.2. Research Procedure
Population and Samples: The population of this study is 400,
being the credit card holders in Bangkok Metropolitan
Region: Bangkok, Nakorn Prathom, Nonthaburi, Prathumtani
and Samutprakarn Province -- the researcher used these
populations as a sample and collected 400 samples by
proportion as follows:
© 2016 | Published by The Standard International Journals (The SIJ)
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 1, January 2016
Table 1: Number of Populations and Proportion
Province
No. of Populations
Proportion (%)
5,673,560
54.27
Bangkok
882,184
8.42
Nakorn Prathom
1,141,673
10.89
Nonthaburi
1,033,837
9.89
Prathumtani
1,241,610
11.85
Samutprakarn
510,511
4.86
Samutsakorn
10,483,375
100.00
Total
Source: Department of Provincial Administration, 2014 [10]
The samples of this study have selected among the credit
card holders in Bangkok Region. But because of unknown
data, therefore, the researcher had calculated from the
unknown sample size by Cochran (1996: 2) formula as
follows :
In case of unknown population size p = 0.5
If confidence level = 95% or significance level = 0.05.,
the value of Z = 1.96
For convenience, the 400 samples were selected from the
proportion of this following population:
Table 2: Number of Proportion and Samples
Province
Proportion (%)
Samples
54.12
216
Bangkok
8.42
33
Nakorn Prathom
10.89
44
Nonthaburi
9.86
40
Prathumtani
11.85
47
Samutprakarn
4.86
20
Samutsakorn
100.00
400
Total
The sampling of this study is simple random sampling,
according to the purpose of this research.
 Instrument
The questionnaire was employed as an instrument in this
study. The questionnaire consists of four parts:
The first part concerns the questions about the personal
background: gender, age, status, occupation, education and
income.
The second part concerns the characteristics of using
credit card: types of credit cards, amount of credit card, line
of credit card, types of using credit card, frequency of using
credit card, place of using credit card and amount expended
of credit card.
All these questions from first and second part are closedend question in multiple choices.
The third part concerns the causes of bad debt: financial
problem, unpaid debt problem, increase in personal debt
problem, decrease in paying debt problem and interest rate
problem.
This third part is the 5 rating scale questions, which the
answerers have opinions about.
 Measurement
The criteria of measurement in rating scale is 5 level of
opinion in the third part - the causes of bad debt, which is
presented into 5 intervals, the interval scale is 0.8
Table 3: Criteria of Rating Scale in Five Level
Mean
Opinion Level
very important
4.21 - 5.00
important
3.41 - 4.20
moderate important
2.61 - 3.40
less important
1.81 - 2.60
very less important
1.00 - 1.80
 Testing
For testing the qualified questionnaire, it is conducted into
validity and reliability.
- Content validity is the extent to which a concept,
conclusion or measurement is well-founded and corresponds
accurately by approving from research specialist; it can help
determine what types of tests to use and help to make sure
that methods used methods are not only ethical, but also a
method that truly measures the idea or construct in question.
- Reliability is the extent to which a measurement gives
results that are consistent. The researcher conducted the
questionnaire by pre-testing 25 samples who were not the
same sample group, and followed by computer programming
in the method of Cronbach’s Coefficient Alpha in the third
part of questionnaire [Cronbach, 7; 8], the result shown as
below.
Table 4: Cronbach’s Alpha of Questions
Questions
Cronbach’s Alpha
Financial problem
0.957
Unpaid debt problem
0.927
Increase in personal debt problem
0.917
Decrease in paying debt problem
0.809
Interest rate problem
0.905
Total
0.967
N of cases = 25
The result exceeds 0.07 (α ≥ 0.9 Excellent -High-Stakes
testing) showing that the research instrument has more
reliability and describes the overall consistency of a measure.
● Data Collecting: The researcher distributed the
questionnaire to 400 credit card holders in Bangkok and
Region Province. The samples have good co-operation to
response the questionnaire. Therefore, the data collection
number of this study is 400 credit card holders, which is
100% of total samples.
● Data Analysis: The collected data were analyzed to
describe the behavior of using credit card in causing of bad
debt : a case study in Bangkok Metropolitan Region. The
descriptive statistics are these: frequency, percentage, mean
and standard deviation, and the inferential statistics are these:
particularly the T-test, F-test were applied to analyze the data.
IV.
RESULT AND DISCUSSION
4.1. Result
The result of this study presents itself in five parts: general
background of personal factors, the characteristics of using
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© 2016 | Published by The Standard International Journals (The SIJ)
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 1, January 2016
credit card, the behavior of using credit cards, the causes of
bad debt and hypothesis testing.
● General background of personal factors: The credit
card holders which responded to the questionnaire shared the
following characteristics: they were females, age between 2930 years old, single status, master degree of education; most
of them are employees in private companies, and have
incomes more over 40,001 baht.
● The characteristics of using credit card: The result of
the characteristics of using credit card found that the samples
have 1-2 credit card holders in amount of 50,000 baht limit.
They use credit cards for spending on consumers goods, at
less than 5,000 baht per time.
● The causes of bad debt: For the causes of bad debt
analysis in 5 dimensions, it was found that the level of
opinion is as follows :
- The financial problems - was rated high level (mean =
3.43) and the highest level is they have expenditure than
income.
- The unpaid debt - was rated medium level (mean =
3.14) and the highest level is they have no discipline in
systematic spending.
- The increase in personal debt problem - was rated
medium level (mean = 3.22) and the highest level is they use
credit card excessively.
- The decrease in paying debt problem - was rated
medium level (mean = 3.26). and highest level is they have
purchasing power in excess normally.
- The interest rate problem - was rated medium level
(mean = 3.22). and the highest level is involves high default
interest rate and cash in advance.
● Hypothesis Testing
Hypothesis 1. The difference in personal factors have
significance in causing of bad debt.
Hypothesis
1.1
1.2
1.3
1.4
Table 5: Conclusion of Hypothesis 1
Cause of bad debt
Personal
No
Factors
Significance
significance
Gender
X (.380)
Age
X (.767)
Status
X (.155)
 (0.005*)
Education
(except interest rate
problems)
Occupation
X (.440)
Income
X (.301)
1.5
1.6
*Sig. = .05
Notice :  significance
X no significance
From the hypothesis 1 testing, the inferential statistics
showed that
1.1 The difference in personal factor with gender has no
significance in causing of bad debt.
1.2 The difference in personal factor with age has no
significance in causing of bad debt
1.3 The difference in personal factor with status has no
significance in causing of bad debt
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1.4 The difference in personal factor with education has
significance in causing of bad debt (except interest
rate problem)
1.5 The difference in personal factor with occupation
has no significance in causing of bad debt.
1.6 The difference in personal factor with income has no
significance in causing of bad debt.
Hypothesis 2. The difference in characteristics of using
credit cards have significance in causing of bad debt
Hypothesis
2.1
2.2
2.3
2.4
2.5
2.6
2.7
Table 6: Conclusion of Hypothesis 2
Cause of bad debt
Characteristics of
No
using Credit Card Significance
Significance
Types of credit
X (.301)
card
Amount of credit
X (.151)
card
Line of credit card
 (.002)*
Types of using
X (.451)
credit card
Frequency of using
X (.292)
credit card
Place of using
X (.175)
credit card
Amount expended
 (.040)*
of credit card
*Sig. = .05
Notice :  significance
X no significance
From the hypothesis 1 testing, the inferential statistics
showed that
2.1 The difference in characteristics of using credit with
types of credit cards has no significance in causing
of bad debt
2.2 The difference in characteristics of using credit with
amount of credit cards has no significance in causing
of bad debt
2.3 The difference in characteristics of using credit with
line of credit cards has significance in causing of
bad debt
2.4 The difference in characteristics of using credit with
types of using credit cards has no significance in
causing of bad debt
2.5 The difference in characteristics of using credit with
frequency of using credit cards has no significance
in causing of bad debt
2.6 The difference in characteristics of using credit with
place of using credit cards has no significance in
causing of bad debt
2.7 The difference in characteristics of using credit with
amount expended of using credit cards has
significance in causing of bad debt
4.2. Discussion
From the result of this study, there are the following research
discussions:
© 2016 | Published by The Standard International Journals (The SIJ)
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 1, January 2016
● The characteristics of using credit card affecting to the
causes of bad debt of people in Bangkok Metropolitan
Region. Most of credit card holders 62.2% have the
occupation in private companies with using credit card for
spending on consumers goods [Loudon & Bitta, 14]. This
result is similar to Chutipongraksa [6] concluded that most of
consumer use credit card for purchasing goods and services
in department store, hotel, hospital, restaurant and so on.
● From the analysis of causing bad debt, the result found
that there are ore expenditure than income, and the fixed
income has insufficient expenditure. Lack of discipline
systematic spending, using credit card with excess necessary,
power of expenditure has more excess normal and high
interest rate of default and cash in advance. This result is
consistent with Bank of Thailand (2014) concluded that the
causes of bad debt from credit are – the credit card holder has
unability to pay, in case of financial problems such as income
insufficient with expenditure, they cannot pay bill collection
with full payment due to irresponsibility.
● In result of hypothesis showed that line of credit card
and amount expended of credit card had significant with the
cause of bad debt. This was because of the level of education,
effecting to level of work, income and purchasing power.
Therefore, the higher level of education, the higher no bad
debt because of ability to pay debt.
V.
CONCLUSION AND FUTURE WORKS
The purpose of this study was to investigate the personal
factors and characteristic of using credit cards which affect
the causes of bad debt. The instrument used for the data
collection was a questionnaire that was composed of three
parts: personal background, the characteristics of using credit
card, and the causes of bad debt. The findings revealed that
the credit card holder which responded to the questionnaire
were females, age between 29-30 years old, single status,
master degree of education; most of them are employees in
private companies which have 1-2 credit card holders in
amount of 50,000 baht limit. They use credit cards for
spending on consumers goods, at less than 5,000 baht per
time.
From the study, it was indicated that the cause of bad
debt analysis in 5 dimensions : the financial problems and the
interest rate problem were rated high level, but the unpaid
debt, the increase in personal debt problem, and the decrease
in paying debt problem was rated medium level. The result of
hypothesis testing, the inferential statistics showed that the
difference in personal factors concerning gender, age, status,
employment and income has no significance in causing bad
debt except education. For the characteristics of using credit
card with types of credit cards, amount of credit cards, types
of using credit cards, frequency of using credit cards, and the
place of using credit cards have no significance in causing
bad debt except limit amount of credit card and amount of
expending credit cards.
Therefore, according to this study, there are some ideas
which are interesting and useful for evaluating the
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characteristics and capacity of credit card holder for the
administrative bad debt risk, as followings:
1. The result showed that the samples are most of
employees in private office who have rather high income and
high purchasing power. These groups of people have credit
card for buying consumer goods, not for withdraw cash in
advance. Therefore, the financial institution which issues the
credit card will give these groups significantly. Also, it
should score the credit rating so that it is the guideline in
accept credit card in the future.
2. As the point of characteristics of using credit card the
samples have the convenience and easy to pay goods and
services. This research result is supported by Boonyam [3],
Tanaung [15] and Thipchun [16]. Hence, the financial
institution which issues the credit card will give the
marketing campaign so that it will approach to the consumer
and will have the relationship between the credit card holder
and business alliance. Consequently, it will help the use of
credit card continuously.
3. The conclusion of the study indicated that the causes
of bad debt were the credit holders have expenditure more
than income, and the fixed income has no insufficient, lack of
discipline systematic spending, using credit card with excess
normal, and the high interest rate of default, also the high
cash in advance. This statement is supported by Engel [11].
Therefore, everybody who concerns will solve the problem
by:
● The financial institutions which issue credit card will
inspect and consider deeply the applicant before issuing the
credit card. They should not focus too much on increasing
sales volume [Darabot, 9]. They should give knowledge to
the credit card holder with correctly and continuously. They
will develop and update the system and equipment so that
they will have modern and safety due to data was stolen and
illegal
● Credit card holders will learn the own right and
comprehend the duty of credit card holder, they will has
discipline the use of credit card and will be the good debtor.
● The regulation: Ministry of Finance, Bank of Thailand,
will have responsibility to control the credit card issue, by
conducting the regulations for the financial institutions to
credit card holder with uphold justice, such as highest interest
and fee, etc.
For the further study, the researcher should use other
method such as depth interview or use the another variables
for the study so that he/she will acknowledge the real
problems and make more the study completely.
EXAMPLES OF QUESTIONNAIRE
Section 2 Characteristics of using credit card
Remark: Please mark / in the block
that is your best
answer
1. Type of credit cards that the respondent uses
1) Credit card issued by any commercial banks in
Thailand
2) Credit card issued by any banks in other countries
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 1, January 2016
3) Credit card issued by any non-financial institutes
4) More than one type in this list above
2. Number of credit cards used
1) 1 – 2 cards
2) 3 – 4 cards
3) 5 – 6 cards
4) more than 7
cards
3. Credit limits
1) not exceed 50,000 baht
2) 50,001 to 100,000 baht
3) 100,001 – 150,000 baht
4) 150,001 – 200,000 baht
5) more than 200,000 baht
4. Types of using credit cards
1) to buy groceries
2) to pay utility bills
3) to get cash advance
4) more than one type of using
5) Frequency of using credit card
1) 1 – 2 times/ month
2) 3 – 4 times/ month
3) more than 5 times/ month
6) Place of using credit card
1) shops
2) department stores
3) gas stations or restaurants
4) hotel/ accommodation
5) other places __________
6) more than one place
7) Amount expended of credit cards
1) not exceed 5,000 baht
2) 5,000 – 10,000 baht
3) 10,001 – 15,000 baht
4) 15,001 – 20,000 baht
5) more than 20,000 baht
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L.J. Cronbach (1951), “Coefficient Alpha and the Internal
Structure of Tests”, Psychometrika, Vol. 16, Pp. 297–334.
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[9]
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J. Darabot (2012), “Innovation in Human Resource
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(2014),
http://www.dopa.go.th/web/index.php.
J.F. Engel (2003), “Consumer Behavior”, 8th Edition, New
York: The Dryden Press.
S. Hill & H. Alexander (2002), “Theory and Research in
Administration” , New York: Mcmillan.
M. Kowhakul (2011), “Credit Management”, Pathumthani
University of Rangsit Press.
Loudon & Bitta (1998), “Projective Technique in Consumer
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P. Tanaung (2006), “Credit Card using Behavior of Krungsri
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Mukda Kowhakul
Home: 40/2850 Prachanivate 3, T.Tasai,
A.Muang, Nonthaburi 11000, Thailand.
Position: Lecturer, Department of Finance and
Investment,
Faculty
of
Business
Administration, Rangsit University, Thailand.
Education:
1979: Master of Education in Business
(M.Ed.in Business), University of Montevallo,
Alabama, U.S.A.
1974: Bachelor of Business Administration. (B.B.A.in Finance),
Major: Finance School of Business Administration, Krirk
University, Thailand.
Experience:
1993 – Present: Lecturer, Department of Finance and Investment,
Faculty of Business Administration, Rangsit University, Thailand.
1986 – 1933: Lecturer, Department of Finance, Faculty of Business
Administration, Krirk University.
1979 – 1986: Lecturer, Department of Finance, Faculty of Business
Administration, Siam University.
Other Position
1987 –1993: Chef of Finance, Assistant Dean, Saving Co-Operation
Manager, Krirk University.
1993 – 2015: Secretary, Associate of Administrative, Associate
Dean of Academic Affair, Head of Department of Finance and
Investment, Rangsit University.
Academic Publications:
Research:
● “Personal Finance Management Affecting to the Saving Behavior
of People in Bangkok Metropolitan Region”, Institute of Research,
Rangsit University, 2015.
● “Behavior of Using Credit Card in Causing of Bad Debt : A Case
Study in Bangkok Metropolitan Region”, Institute of Research,
Rangsit University, 2014.
● “Learning Achievement of Students in FIN 201 : Business
Finance”, Department of Learning Development, Rangsit
University, 2014.
● “The Readiness of RSU Students for AEC Labor Market”,
Department of Planning, Rangsit University, 2013.
Articles:
● “Learning Achievement of Students in FIN 201 : Business
Finance”, Journal of Rangsit University : Teaching & Learning,
Vol.8, No.1.January-June, 2014.
● “How to Optimal Capital Structure Management?”, Journal of
Business Administration and Economics Review, Vol. 8, No.2. JulyDecember, 2012.
© 2016 | Published by The Standard International Journals (The SIJ)
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 4, No. 1, January 2016
● “The Credit Rating of Instrument Debt” Journal of Business
Administration and Economics Review, Vol. 6, No.1. January-June,
2006.
● “Credit Risk Rating in Credit of Financial Institutions” Journal of
Business Administration and Economics Review, Vol. 6, No.1.
January-June, 2005.
Books:
Credit Management, Financial Markets and institutions, Risk
Management and Insurance.
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