Credit Card Use and Risks in the E-Market: A Case Study in Melbourne, Australia

Credit Card Use and Risks in the E-Market: A Case Study in Melbourne, Australia

Huong Ha (University of Newcastle, Singapore)
DOI: 10.4018/978-1-4666-3954-6.ch013
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Abstract

This chapter aims to (1) examine the awareness and experience of undergraduates in Melbourne, Australia of current and potential online risks, (2) explore how undergraduates deal with online incidents, and (3) make policy recommendations on how to enhance e-consumer protection. A total of 802 valid responses were received from the surveys conducted in Melbourne, Australia in 2007-2008. Findings demonstrate that most of the respondents were not aware of online incidents which could lead to credit card fraud. A number of them have encountered online incidents. Also, several respondents would less likely seek help from government and/or non-government organisations when encountering online incidents. Overall, credit card use and risks in the e-market is an under-research area in Australia, and this is a pilot study in this field. Findings from this chapter would contribute to the body of knowledge of credit card use and debt due to online shopping, and e-consumer protection.
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Research Objectives

The objectives of this paper are to:

  • 1.

    Examine the awareness and experience of undergraduates in Melbourne, Australia, of current and potential online risks associated with credit card use,

  • 2.

    Explore how undergraduates deal with online incidents, and

  • 3.

    Make policy recommendations on how to enhance consumer protection in the e-market.

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Literature Review

Credit Card Phenomenon in Australia

In Australia, credit card use is booming, likely fuelled by increasing acceptance of credit as a part of everyday life, and as instant credit facilities (Malbon, 1999; 2005). The number of credit card holders has increased from 13,915,000 in 2007 to 15,010,000 in 2012 (Reserve Bank of Australia, 2007; 2012).

The amount of credit card debt increased from A$17.4 billion in 2000 to A$50 billion in 2012, and the average debt is $3,333 per card in 2012 (Valins, 2004; Credit Card Compare Australia, 2011; Yeates, 2012). The amount of the cash advances reached A$863,000,000 in March 2011 and A$858,000,000 in May 2012 (Reserve Bank of Australia, 2011, 2012). In February 2007, the average credit card balance was about $3,000, and this amount increased to $3,141 in October 2009 (Saulwick, 2007; Schulz, 2011). However, statistics about credit card debt due to online purchases are not available.

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