Moving into the Mainstream: Who Graduates from Secured Credit Card Programs?

Larry Santucci

No 19-2, Consumer Finance Institute discussion papers from Federal Reserve Bank of Philadelphia

Abstract: Secured credit cards--credit cards whose limit is fully or partially collateralized by a bank deposit--are considered a gateway product to mainstream credit access. As consumers demonstrate good usage and repayment behavior, they may be offered the opportunity to graduate to an unsecured credit card. This paper uses anonymized account-level data to examine the prevalence of account graduation in the secured credit card market since 2012. Using a fixed effects regression model, we identify a set of usage and repayment behaviors that are correlated with account graduation.

Keywords: credit cards; secured credit cards; account graduation (search for similar items in EconPapers)
JEL-codes: D14 G21 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2019-07-02
New Economics Papers: this item is included in nep-ban and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpdp:19-02

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DOI: 10.21799/frbp.dp.2019.02

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