The influence of behavioral factors on credit card default among Muslim in Klang Valley

The increased of expenditure in recent years has led to the increase of credit card users. Unfortunately, due to certain circumstances, there has been a rise in credit card defaults among the users. Hence, this research aims to investigate the influence of behavioral factors on credit card default among Muslim in Klang Valley, mediating effects of attitude and intention to pay. By utilizing a quantitative approach, six variables namely credit card default, intention to pay, perceived behavior control, religiosity, subjective norm and attitude were measured based on previous validated instruments. 700 questionnaires were distributed to Muslim credit card defaulters in
the Klang Valley. 323 questionnaires were returned, representing 46 percent response
rate. The main statistical analysis used is structural equation modeling (SEM). The
findings reveal that subjective norm, perceived behavior control, religiosity are significant predictors of intention to pay. Perceived behavior control, subjective norm and religiosity are also significant in predicting attitude. Additionally, attitude is the
significant mediator between the linkage of perceived behavior control and credit card
default. The result discovers there are high defaulters even though the credit card holders have positive intention and attitude towards payment. This result implies that credit card holders might have other financial commitments which made them use credit card to sustain living beyond their mean. They could not control their spending urge when credit card is available. Credit counseling body needs to educate credit card holders on financial management and credit control. These outcomes are immensely valuable for practitioners in planning and executing tailor-made strategic
plans.