CREDIT CARD CUE EFFECT: FACTORS INFLUENCING SPENDING WITH MEDIATING VARIABLES OF PERCEIVED FINANCIAL WELL-BEING AND CREDIT CARD ASSOCIATION

• Main Author: Suhada, Agustion
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/79548
• Institution: Institut Teknologi Bandung

COVID-19 pandemic significantly impacted Indonesia's economy, affecting financial industry. To bolster economic recovery and stimulate GDP, initiatives were taken by the Indonesian government to increase one of the GDP factors, personal spending. Bank Indonesia reduced the maximum credit card interest rate from 2% to 1.75% per month starting in July 2021. The number of credit card transactions increased by 3.29% compared to the previous year. However, the transaction remains lower than pre-pandemic levels. To help the Indonesian government stimulate credit card spending, factors that influence consumer spending behavior need to be understood better. The independent variables in this study are Credit Card Cues, Financial Literacy, and Sensitivity to Pain of Payment. The mediating variable in this study is Perceived Financial Well-Being and Credit Card Association (Spending-Related Thought and Debt-Related Thought). The dependent variable is spending. The study employs a quantitative approach and utilizes PLS-SEM to analyze data. The findings reveal that male exhibit significantly higher perceived financial wellbeing and spending. Furthermore, income groups have differences in perceived financial well-being and spending. The study also reveals that financial literacy positively influences perceived financial well-being, while credit card cues and sensitivity to pain of payment negatively influence perceived financial well-being. In addition, financial literacy and credit card cues positively influence spendingrelated thought, while sensitivity to pain of payment negatively influence spending-related thought. Furthermore, financial literacy and credit card cues positively influence debt-related thought. Moreover, credit card cues and perceived financial well-being positively influence spending. The findings showed that perceived financial well-being acts as a negative mediator between credit card cues & pain of payment sensitivity and spending, but positively mediates financial literacy and spending.