Credit card minimum payment restrictions

Saved in:

Bibliographic Details
Authors and Corporations:	Allen, Jason (Author), Boutros, Michael (Author), Guttman-Kenney, Benedict (Author)
Other Authors:	Boutros, Michael [Author] • Guttman-Kenney, Benedict [Author]
Edition:	Last updated: July 15, 2024
Type of Resource:	E-Book
Language:	English
published:	[Ottawa] Bank of Canada [2024]
Series:	Bank of Canada: Staff working paper ; 2024, 26
Subjects:	Credit and credit aggregates Financial system regulation and policies Graue Literatur
Source:	Verbunddaten SWB Lizenzfreie Online-Ressourcen

Description
Summary:	We study a government policy that restricts repayment choices with the aim of reducing credit card debt. The policy requires the minimum payment on credit card balances in Quebec to be at least 2% of the statement balance for cards opened before August 2019 and at least 5% for cards opened after August 2019. The rest of Canada is unaffected. We estimate this policy's effects by applying a difference-in-differences methodology to comprehensive, Canadian consumer credit-reporting data. The policy causes a persistent increase in minimum payments. The policy has trade-offs: reducing revolving debt comes at a cost of reducing credit access, and potentially increasing delinquency.
Physical Description:	1 Online-Ressource (circa 59 Seiten); Illustrationen
DOI:	10.34989/swp-2024-26