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Friday, March 27, 2015

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Payment Cards Center

The Payment Cards Center provides meaningful insights into developments in consumer credit and payments that are of interest not only to the Federal Reserve but also to the industry, other businesses, academia, policymakers, and the public at large. The center carries out its work through an agenda of research and analysis as well as forums and conferences that encourage dialogue incorporating industry, academic, and public-sector perspectives.

To listen to podcasts related to the Payment Cards Center, visit our podcasts page.

For information on all research on consumer credit and payments, go to our Program in Consumer Credit & Payments page.

What's new

Call for Papers: New Perspectives on Consumer Behavior in Credit and Payments Markets

A Conference Cosponsored by the Research Department and Payment Cards Center
of the Federal Reserve Bank of Philadelphia

October 1-2, 2015
Submission deadline: June 30, 2015

This conference seeks to capture the latest research on household finance and consumer payments. We encourage researchers to submit theoretical and empirical studies that reflect the entire range of approaches and methodologies. We also encourage submissions that address the design and efficacy of regulations for consumer credit markets. Follow the link above for full submission details.

February 2015

Discussion Paper Released: A Tale of Two Vintages: Credit Limit Management Before and After the CARD Act and Great Recession

This paper uses tradeline-level credit card data to examine initial credit limits and early credit limit increases before and after the Great Recession and implementation of the CARD Act. I compare two vintages of credit card accounts: those opened in 2005 and 2011, and follow each vintage for more than two years after account opening. In general, I find that significantly less credit was extended to approved credit card applicants in 2011 than in 2005. Accounts in the 2011 vintage started out with lower initial credit limits, received fewer limit increases, and received a smaller increase amount in dollar terms. These changes were most pronounced among the riskiest 25 percent of accounts opened in 2011. For this segment of the market, the median initial credit limit fell 66.7 percent to $500, and the median limit increase amount fell by at least 25 percent at each observation point. At the same time, limit increases occurred more often and sooner for this group, perhaps in recognition of the very low starting limits.

Payment Cards Center Updates Consumer Credit & Payments Statistics

The statistics are divided into a Consumer Credit Snapshot and a Consumer Payments Snapshot. They are derived from various sources including the Federal Reserve Payments Study (various years), the Federal Reserve Consumer Credit — G.19, and Federal Reserve Financial Accounts of the United States — Z.1.

October 2014

Visiting Scholar Working Paper Revised: Debt Collection Agencies and the Supply of Consumer Credit

The author examines contract enforcement in consumer credit markets by studying third-party debt collection. In order to identify the effect of debt collectors on credit supply, he constructs a state-level index of the tightness of debt collection laws. The author finds that stricter regulations of third-party debt collection lead to fewer openings of revolving lines of credit. This effect appears to be the result of lower recovery rates due to fewer debt collectors per capita when debt collection laws are tightened. Less stringent debt collection laws are associated with a larger and riskier pool of borrowers, consistent with the view that effective debt collection enables creditors to expand lending to new and risky borrowers.

  • Last update: February 11, 2015

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