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Marriage between credit cards and the Internet: Buying is just a click away!

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  • Hem C. Basnet
  • Ficawoyi Donou‐Adonsou

Abstract

This paper examines whether Internet access positively affects credit card balances. To that end, we compare the 2010 and 2013 Surveys of Consumer Finances, analyze the consistency of the results over time, and provide the rationale for any resulting differences. Using the censored techniques, our results indicate that Internet access has a positive effect on credit card balances, which suggests that consumers with Internet access are prone to higher balances compared to those without. The probability of carrying positive balances was larger in 2010 compared to 2013. Overall, the results suggest that, while the financial crisis might have contributed to higher balances in 2010, the economic recovery afterward seems to have eased the burden of credit card debt.

Suggested Citation

  • Hem C. Basnet & Ficawoyi Donou‐Adonsou, 2018. "Marriage between credit cards and the Internet: Buying is just a click away!," Review of Financial Economics, John Wiley & Sons, vol. 36(3), pages 252-266, July.
    • Handle: RePEc:wly:revfec:v:36:y:2018:i:3:p:252-266
    DOI: 10.1002/rfe.1019
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    References listed on IDEAS

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    1. E. J. Bird & P. A. Hagstrom & R. Wild, "undated". "Credit Cards and the Poor," Institute for Research on Poverty Discussion Papers 1148-97, University of Wisconsin Institute for Research on Poverty.
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    4. Kinsey, Jean, 1981. "Determinants of Credit Card Accounts: An Application of Tobit Analysis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 8(2), pages 172-182, September.
    5. Wang, Lili & Lu, Wei & Malhotra, Naresh K., 2011. "Demographics, attitude, personality and credit card features correlate with credit card debt: A view from China," Journal of Economic Psychology, Elsevier, vol. 32(1), pages 179-193, February.
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    1. K. Majamaa & A.-R. Lehtinen, 2022. "An Analysis of Finnish Debtors Who Defaulted in 2014–2016 Because of Unsecured Credit Products," Journal of Consumer Policy, Springer, vol. 45(4), pages 595-617, December.

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