Impact of Credit Card Incentives on Usage Pattern: An Application of Structural Equation Modeling

Abstract

This study examines the influence of credit card incentives on usage patterns, specifically credit card transactions and transaction purposes, utilizing Structural Equation Modeling (SEM). It explores the historical evolution of credit cards, operational procedures, and security measures like the Card Verification Method (CVM). With a focus on India's burgeoning credit card industry, the research aims to comprehend consumer behavior and associated challenges. Employing a mixed-methods approach and Smart PLS software, the study seeks to provide detailed insights into credit card dynamics, offering practical recommendations for policymakers, financial institutions, and consumers. Through meticulous analysis, the research confirms the reliability of the measurement model, emphasizing the importance of discriminant validity and balancing rigor with practicality in model establishment.