This study shows that the increasing phenomenon of the adoption of credit cards in India, especially in the semi-urban areas, has brought about a major shift in the behaviour of consumers and raised important questions about prudent credit management practices. This assumes significance as neoclassical financial theories rely on rational behaviour for decisionmaking; conversely, the field of behaviour financial theories advocates the countervailing influence of mental biases and financial literacy in affecting consumer behaviour with respect to credit management practices. It is within this context that the paper will focus on the influence of overconfidence bias, herding behaviour, and financial literacy on the adoption practices of credit card holders in the Haridwar district of India.

The research uses a descriptive and empirical research design with primary data collection techniques. A total of 100 credit card consumers were surveyed for data collection using a structured questionnaire. The data has been analyzed using descriptive statistics and simple regression analysis. The research has tried to assess the individual influence as well as the combined influence exerted by the behavioural as well as knowledge attributes considered on the usage of the credit card. Demographic variables like age, sex, occupation, income level, and experience with the use of credit cards have been analyzed.

The results indicate that financial literacy and herding action influence the usage of the credit card significantly and positively. On the other hand, overconfidence bias was spotted to influence the usage of the credit card positively but insignificantly. This confirms that reliance on financial knowledge and herding action by consumers is essential in determining the usage of the credit card. On the other hand, mere reliance on the overconfidence bias does not have any significant effect on determining the usage of the credit card. This shows that the proposed model is robust.