Research On The Relationship Between The Credit Limit And The Attitude Of Credit Card Spending

Along with the explosive development of the banking industry,the status of credit cards in the banking business has gradually been taken seriously.Credit card business has become one of important profit components for banks.At the same time,the credit cards are powerful and can be used as a payment instrument or credit tool.However,the functions of credit cards issued by most banks are becoming more and more homogenous and have a high degree of mutual substitution.They do not catch users well and stimulate the pain points of users.Therefore,it is one of the issues that banks are more concerned about.The factors that influence the credit card holder's consumption are affected by the factors.How banks can seize customers and stimulate customers better to use credit cards.Therefore,we use the internal credit card data of a large domestic bank.This paper discusses what kind of people are more willing to use credit cards by using multivariate regression and diff-in-diff model analysis.Also we discuss whether the increase in credit limit will stimulate its consumption,and whether the credit limit is raised will lead to an increase in default rates.Further,we discuss whether the credit should be decentralized.First,through the study of the consumption function theory,this paper selects representative demographic variables and discusses the relationship between demographic variables and credit card consumption through multiple regression models.According to our research results,there is a significant correlation between credit card spending habits and personal characteristics.1.Male cardholders use credit cards to spend more than women;2.Cardholders with higher education levels have greater credit card overdrafts;3.Comparing to married and single persons,cardholders who experience divorce are more willing to overdraw consumption;4.The relationship between age and credit card spending is inverted U-shaped,middle-aged people are the main use group of credit cards;5.Cardholders who are more closely related to banks,their willingness to use credit cards for consumption is stronger.Second,this paper establishes a "treatment group" and a "control group" through the diff-in-diff model to study the relationship between the increase in credit lines and consumer behavior after bank credit decentralization Our research shows that as cardholders' credit lines are increased,their personal consumption level will increase too.Especially for new bank customers,the improvement of consumption levels is even clearer,and for the bank's old customers,the increase in credit limits has less impact on their consumption levels.Then,we further observed how bank credit card default rates will change in the event of an increase in credit lines.We also built contrasts using the diff-in-diff model.The results show that with the increase in credit lines,credit card holders will experience excessive consumption,especially for new bank customers.The increase in credit lines has been broken Its originalbalance of payments resulted in a higher credit card default rate.Finally,due to the fact that the banks' old customers spend not too much,we have conducted further research on the banks' old customers.We compared the change before and after credit card policy.We found that the old customers recommended by "soft information" performed well,showing that the scorecard "hard information" is flawed and does not respond well to the customer's true credit,and "soft information" just makes up for it.The banks can also use this point to appropriately decentralize,achieve the win-win effect of the bank and the customer.The research in this paper can be used for over-consumption and relationship financing research.This paper uses the diff-in-diff method to construct a "treatment group" and a"control group" for research comparison While fixing secondary factors,it focuses on the dynamic changes of major factors.process.The results of this paper will help the bank's credit card division to accurately design credit card products for segmented populations.It will also help bank risk control departments better manage their credit risk and avoid large area defaults.At the same time,it puts forward deficiencies in the traditional way of reviewing bank credit scores and credit lines,and points out new directions.