Revolving versus Convenience Use of Credit Cards: Evidence from U.S. Credit Bureau Data

Scott Fulford and Scott Schuh
Additional contact information
Scott Schuh: West Virginia University

No 20-12, Working Papers from Department of Economics, West Virginia University

Abstract: Credit card payments and revolving debt are important for consumer theory but a key data source—credit bureau records—does not distinguish between current charges and revolving debt from the previous month. We develop a theory-based econometric methodology informed by survey evidence to estimate the likelihood a consumer is revolving each quarter. We validate our approach using a new survey linked to credit bureau data. For likely revolvers: (1) 100 percent of an increase in credit becomes an increase in debt eventually; (2) credit limit changes are half as salient as debt changes; and (3) revolving status is extremely persistent.

Keywords: Credit cards; revolving; convenience use; credit bureau (search for similar items in EconPapers)
JEL-codes: C81 D14 G51 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2020-10
New Economics Papers: this item is included in nep-pay
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Citations: View citations in EconPapers (2)

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Journal Article: Revolving versus Convenience Use of Credit Cards: Evidence from U.S. Credit Bureau Data (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:wvu:wpaper:20-12

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