SURVEY ON CREDIT CARD BENEFITS

Tittle– Factor analysis of product (credit card)

Author– Siddharth Singh (021330324003)

                   Anushka Namjoshi (021330024066)

                   Mrinal Das(021330024343)

Introduction– Credit card which is globally used card is a financial tool issued by banks and financial institutions that allows individuals to borrow funds to make purchases, pay bills, or withdraw cash within a specified credit limit. Credit cards are widely used for convenience, security, and the ability to spread out payments over time.

The 10 Characteristics of Credit card are:

1. Cash Back
2. Emergency financial access
3. Credit limit
4. Free airport lounge access
5. CIBIL benefits
6. Buy on credit
7. Convenience of Transaction
8. Improve spending habits
9. Foreign Transaction Convenience
10. Discount and offers

Objective– To reduce the dimension

Data Collection-The survey was conducted using Google Forms to evaluate perceptions of Credit Card based on ten essential characteristics: Cash back , Emergency financial access Credit limit  ,Free airport lounge access ,CIBIL benefits ,Buy on credit Convenience of Transaction ,Improve spending habits ,Foreign Transaction Convenience ,Credit limit.A total of 50 respondents, consisting of friends and relatives, participated in the survey. Each question targeted one of these specific characteristics, as outlined below-

 

 

1.Discounts and offers: “Do you get discount and offers by using credit card”?

2.Cash Back– “How often you get cash back by using credit cards”?

3.Emergency financial access– “Do you agree that credit card help you in emergency financial access”?

4.Credit limit– “Do you have flexible credit limit”?

5.Free airport lounge access: “Do you get benefit of free airport lounge access by using credit card”?

6.CIBIL benefit: “credit card help you to improve your CIBIL score”?

7.Buy on credit: “Credit card help you by buying on credit”?

8.Convenience of Transaction:

9.Improve spending habitsn:  “Does credit card help you in improving your spending habits”?

10.Foreign Transaction Convenience: “Does credit card make your foreign transaction convenience”?

Participants rated their responses on a Likert scale with the following values

–  lowest rating – One star

–  Moderate rating – Two star

– Highest rating – Three star

This approach enabled us to gather detailed feedback on each characteristic, providing comprehensive insights into the overall perception and satisfaction with CREDIT CARD among the respondents.

 

 

 

 

 

 

 

Data Analysis:

1.KMO AND BATLETTERS TEST

KMO and Bartlett’s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.	.878

 

The KMO Measure of Sampling Adequacy is 0.878, indicating that this dataset is highly suitable for factor analysis. With values above 0.8, data is considered “meritorious,” meaning strong relationships exist among variables, making them ideal for extracting meaningful factors. A KMO above the 0.5 threshold confirms that shared variance is present, enhancing interpretability and ensuring reliable factor extraction. This high adequacy suggests the data has coherent structures, making it robust for analysing preferences.

 

 

 

2.Total Variance Explained

Total Variance Explained
Component	Initial Eigenvalues			Extraction Sums of Squared Loadings			Rotation Sums of Squared Loadings
	Total	% of Variance	Cumulative %	Total	% of Variance	Cumulative %	Total	% of Variance	Cumulative %
1	5.335	53.347	53.347	5.335	53.347	53.347	3.384	33.842	33.842
2	1.085	10.845	64.192	1.085	10.845	64.192	3.035	30.350	64.192
3	.817	8.170	72.362
4	.669	6.686	79.048
5	.563	5.630	84.678
6	.444	4.442	89.120
7	.350	3.502	92.622
8	.281	2.813	95.435
9	.235	2.345	97.780
10	.222	2.220	100.000
Extraction Method: Principal Component Analysis.

 

2. Total variance explained

 

• Factor Selection: The analysis yields three factors with eigenvalues greater than 1, which typically indicates they contribute meaningfully to explaining variance.
• Variance Explained:
  • Factor 1 has an eigenvalue of 5.335 and explains 53.38% of the total variance, which is substantial and suggests a dominant underlying component.
  • Factor 2 contributes an additional 10.85% of the variance, bringing the cumulative variance explained to 64.19%.
• Rotation Impact: After rotation, Factor 1 explains 33.84%, Factor 2 explains 30.35%, , redistributing variance more evenly across factors, which can enhance interpretability.

 

3.Rotated Component Matrix

Rotated Component Matrixa
	Component
	1	2
Discounts and Offers	.373	.740
Cash Back	.717	.299
Emergency financial access	.217	.839
Credit limit	.698	.382
Free airport lounge access	.830	.046
CIBIL benefits	.548	.618
Buy on credit	.187	.889
Convenience of transaction	.684	.298
Improves spending habits	.567	.243
Foreign Transaction Convenience	.619	.477
Extraction Method: Principal Component Analysis.  Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 3 iterations.

 

The Rotated Component Matrix shows three main factors derived from the survey attributes, indicating how each attribute loads onto these factors.

The Rotated Component Matrix, derived from a survey on credit card features, shows two primary factors onto which various credit card attributes are grouped. Factor analysis was conducted with Principal Component Analysis (PCA) and Varimax rotation to maximize the loadings on each factor for a clearer distinction between them. Here’s a breakdown:

Interpretation of Components (Factors):

1. Component 1:
   • Attributes with high loadings on Component 1 (>0.5) include:
     • Cash Back (.717)
     • Credit Limit (.698)
     • Free Airport Lounge Access (.830)
     • Convenience of Transaction (.684)
     • Foreign Transaction Convenience (.619)

These attributes appear to cluster around convenience and accessibility, which suggests that Component 1 represents a factor related to the practical benefits and convenience of using the credit card. These features are likely valued by customers looking for immediate, easy-to-use benefits, such as cashback, ease of foreign transactions, and lounge access.

2. Component 2:
   • Attributes with high loadings on Component 2 (>0.5) include:
     • Discounts and Offers (.740)
     • Emergency Financial Access (.839)
     • CIBIL Benefits (.618)
     • Buy on Credit (.889)

Component 2 appears to cluster around attributes that enhance financial flexibility and access to credit. This component might represent a factor related to financial security and support that the credit card provides, such as emergency access to funds, improving credit score, and providing buying power.

Summary:

• Component 1 (Practical Benefits and Convenience): This factor includes attributes that enhance the user’s everyday experience with easy access and added convenience.
• Component 2 (Financial Flexibility and Security): This factor includes attributes that support the cardholder’s financial stability and purchasing power.

This rotated component matrix gives insight into customer preferences, showing that practical convenience and financial flexibility are key factors when it comes to credit card features.