Arbeitspapier

The credit card debt puzzle: The role of preferences, credit risk, and financial literacy

We use the 1979 National Longitudinal Survey of Youth to revisit what is termed the credit card debt puzzle: why consumers simultaneously co-hold high-interest credit card debt and lowinterest assets that could be used to pay down this debt. This dataset contains unique information on intelligence, financial literacy, and preferences, while also providing a complete picture of households' balance sheets. Relative to individuals with no credit card debt but positive liquid assets, individuals in the puzzle group have higher discount rates, slightly lower financial literacy scores, and very different perceptions on future credit risk: many individuals are using credit cards for precautionary motives.

Sprache
Englisch

Erschienen in
Series: Working Papers ; No. 16-6

Klassifikation
Wirtschaft
Household Saving; Personal Finance
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Macroeconomics: Consumption; Saving; Wealth
Thema
household finance
risk aversion
time preferences
precautionary motives
bankruptcy
foreclosure

Ereignis
Geistige Schöpfung
(wer)
Gorbachev, Olga
Luengo-Prado, María José
Ereignis
Veröffentlichung
(wer)
Federal Reserve Bank of Boston
(wo)
Boston, MA
(wann)
2016

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Gorbachev, Olga
  • Luengo-Prado, María José
  • Federal Reserve Bank of Boston

Entstanden

  • 2016

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