Convenience or necessity? understanding the recent rise in credit card debt

Kathleen W. Johnson

No 2004-47, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Economist disagree whether the recent increase in credit card debt has been detrimental to U.S. household. However, many rely on a measure of revolving credit published by the Federal Reserve, which captures transactions in which a credit card is used because of its advantages over cash or a check. An increase in debt stemming from such convenience use likely would not signal greater financial vulnerability for households. In this paper, I present evidence that some of the significant increase in both the level of credit card debt and it growth from 1992 to 2001 was due to convenience use.

Keywords: Credit cards; Debt (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (4)

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