Credit and Debit Card Usage and Cash Flow Management Control by Customers: Evidences from Commercial Banks Customers in Kisumu City, Kenya

  • JS Simiyu
  • G Momanyi
  • KI Naibei
  • AJ Odondo


In the recent past, the banking sector in Kenya has witnessed a rapid growth, issuing thousands of credit cards and millions of debit cards to their customers. The frequency in which customers use these cards for various transactions raised concerns of whether customers had lost control over their finances. Previous studies on this area have provided very little understanding on the impact of use of debit and credit cards on customers‟ cash flow management control. This study sought to determine the extent of use of debit and credit cards in cash deposits, withdrawals and purchase transactions at retail outlets and to determine its effects on cardholder‟s cash flow management. Data was collected through a structured questionnaire administered to a sample of 35 debit and credit cardholders each, drawn from customers of 7 main commercial banks in Kisumu city, Kenya. The study revealed that both debit and credit cards usage increases cash outflows compared to cash inflows and that use of these cards has increased consumption levels as opposed to investments. As a premier study in Kenya, this study will greatly help in the understanding of the impact debit and credit cards in developing countries which are yet to advance in technology.

Key words: Debit cards, credit cards, commercial banks, Kenya.


Journal Identifiers

eISSN: 2070-0083
print ISSN: 1994-9057