The Perceived Risk and The Consumer Decision-Making Process- A Study on Credit Card Holders

Abstract: The market changing of the credit card segment has driven many credit card providers reconstructing their business models and set up strategies in order to attract and retain customers. This leads to an idea of studying the underlying factors behind the consumers’ decision-making of using credit cards. After examining different Consumer Decision-Making theories and their influential factors, we find that the perceived risk is not included as an influential factor in the Consumer Decision Process (CDP). The perceived risks such as financial, psychological, social and performance are not regarded in the existing CDP theories, which we believe is important in the case of credit card usage. Therefore, the aim of this study is to investigate if the perceived risk occurs in the CDP. Our study is focusing on the existing credit card holders in Sweden. Eight hypotheses are designed to test in which stage of the CDP, the perceived risk occurs and whether it affects the consumers’ decision-making concerning with credit cards usage. Although our result cannot be generalized, because of the size of the chosen population is too small, we do find some indication of the perceived risk actually affects the CDP, especially in the first stage of the Decision-Making Process. Keywords: Consumer Decision Process, Perceived Risk, Credit Cards