Credit card minimum payment restrictions

Saved in:

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:

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