 The COVID-19 shock and consumer credit: Evidence from credit card dataAkos Horvath, Benjamin Kay and Carlo Wix Journal of Banking & Finance, 2023, vol. 152, issue C Abstract: We study the dynamic effect of the COVID-19 shock on credit card use in 2020. Local case incidence had a strong negative effect on credit card spending in the early months of the pandemic, which diminished over time. This time-varying pattern was driven by the fear of the virus, rather than government support programs, consistent with the “pandemic fatigue” of consumers. Local pandemic severity also had a strong effect on credit card repayments. These spending and repayment effects offset each other, resulting in no effect on credit card borrowing, consistent with credit-smoothing behavior. The local stringency of nonpharmaceutical interventions also had a negative effect on spending and repayments, albeit smaller in magnitude. We conclude that the pandemic itself was a more important driver of changes in credit card use than the public health policy response. Keywords: Credit card use; Household spending and borrowing; COVID-19; Nonpharmaceutical interventions; Credit-smoothing (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:152:y:2023:i:c:s0378426623000791 DOI: 10.1016/j.jbankfin.2023.106854 Access Statistics for this article Journal of Banking & Finance is currently edited by Ike Mathur More articles in Journal of Banking & Finance from Elsevier |
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