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Credit Cards: Transactional Convenience or Debt‐Trap?

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  • Stephen Brown
  • Chris Veld
  • Yulia Veld‐Merkoulova

Abstract

We survey individuals on their credit card usage. Contrary to popular press, most credit card holders use credit cards in a responsible manner. They tend to use credit cards for transaction convenience and pay little interest. Only a minor subset of people uses credit cards to access expensive credit, with only 7% of credit card holders in our sample never paying the balance in full. Credit card debt is more common among older, less financially literate, and less trusting respondents. Even individuals with credit card debt are well aware about its costs and are likely to make informed financial choices.

Suggested Citation

  • Stephen Brown & Chris Veld & Yulia Veld‐Merkoulova, 2020. "Credit Cards: Transactional Convenience or Debt‐Trap?," International Review of Finance, International Review of Finance Ltd., vol. 20(2), pages 295-322, June.
    • Handle: RePEc:bla:irvfin:v:20:y:2020:i:2:p:295-322
    DOI: 10.1111/irfi.12228
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    References listed on IDEAS

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    Cited by:

    1. Khan Jahirul Islam & Julien Picault, 2025. "One card fits all? Exploring the incidence, intensity, and extent of credit card use in Canada (1999–2019)," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 30(1), pages 1-28, March.

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