Econometric analysis of association of credit cards with certain macroeconomic variables: Turkey application

With parallel to increase and diversification in human requirements and demands, a historical change has been witnessed in pay instruments. Money has currently been a vital indispensable part of economic life as had been in the past. Due to risks like money transfer and security, new pay instruments ar required. Pay instruments may be in cash or other than cash. More common ones other than cash are cheque, eloctronic money, credits and debit cards and direct obligation. Most people would rather use credits cards than money. Credits cards have many advantages over other pay instruments, in particular cash. However, because they could not perform store of value function of cash, it is not included in cash definition. Credit card owners has been 44.392,614 as of 2009, it has been increased to 46.518.538 as of October, 2010. Rapidly growing this pay instrument has some positive and negative effects on economy, as well. Association of credit card use with money supply, inflation and gross domestic product is analyzed in the study. It is assessed that total amount of credit cards domestic use has some statistically significant effects on consumer price index, M1 money suply and gross domestic product. Credit card use has a positive linear relation with GDP and CPI whereas it has a negative linear relation with M1 money supply.Keywords: Money, Pay Instruments, Credit Card, Debit Card, Cheque.