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Where is the missing credit card debt? Clues and implications

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  • Jonathan Zinman

Abstract

Jonathan Zinman, an assistant professor of economics at Dartmouth College and a visiting scholar with the Payment Cards Center, makes a casual comparison of industry and household data sets which suggests that households underreport credit card borrowing by a factor of three. This paper offers some reassurance and several new stylized facts. Accounting for differences in definitions between household and industry measures reduces debt underreporting to a factor of two. Underreporting is less severe for general-purpose than for other cards. The true underreporting factor has remained stable over the past 15 years, even as 26 million households entered the market. Households report charges and account holding relatively accurately.

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File URL: http://www.philadelphiafed.org/payment-cards-center/publications/discussion-papers/2007/D2007sept_zinman-missing-credit-card-debt.pdf
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Bibliographic Info

Paper provided by Federal Reserve Bank of Philadelphia in its series Payment Cards Center Discussion Paper with number 07-11.

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Date of creation: 2007
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Handle: RePEc:fip:fedpdp:07-11

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Keywords: Credit cards ; Debt;

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  1. Johnson Kathleen W., 2007. "The Transactions Demand for Credit Cards," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-33, March.
  2. David B. Gross & Nicholas S. Souleles, 2002. "Do Liquidity Constraints And Interest Rates Matter For Consumer Behavior? Evidence From Credit Card Data," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 149-185, February.
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Cited by:
  1. Gathergood, John, 2012. "Self-control, financial literacy and consumer over-indebtedness," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 590-602.
  2. McKernan, Signe-Mary & Ratcliffe, Caroline & Kuehn, Daniel, 2013. "Prohibitions, price caps, and disclosures: A look at state policies and alternative financial product use," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 207-223.
  3. Karlan, Dean S. & Zinman, Jonathan, 2009. "Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila," CEPR Discussion Papers 7396, C.E.P.R. Discussion Papers.
  4. Alice M. Henriques & Joanne W. Hsu, 2013. "Analysis of wealth using micro and macro data: a comparison of the Survey of Consumer Finances and Flow of Funds Accounts," Finance and Economics Discussion Series 2013-46, Board of Governors of the Federal Reserve System (U.S.).
  5. Victor Stango & Jonathan Zinman, 2011. "Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees," NBER Working Papers 17028, National Bureau of Economic Research, Inc.
  6. Victor Stango & Jonathan Zinman, 2009. "What Do Consumers Really Pay on Their Checking and Credit Card Accounts? Explicit, Implicit, and Avoidable Costs," American Economic Review, American Economic Association, vol. 99(2), pages 424-29, May.

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