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.
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.
Working Paper Released: Do Student Loan Borrowers Opportunistically Default? Evidence from Bankruptcy Reform
Bankruptcy reform in 2005 eliminated debtors' ability to discharge private student loan debt in bankruptcy. This law aimed to reduce costly defaults by diminishing the perceived incentive of some private student loan borrowers to declare bankruptcy even if they had sufficient income to service their debt. Using a unique, nationally representative sample of anonymized credit bureau files, the authors examine the bankruptcy filing and delinquency rates of private student loan borrowers in response to the 2005 bankruptcy reform. They do not find evidence that the nondischargeability provision reduced the likelihood of filing bankruptcy among private student loan borrowers as compared with other debtors whose incentives were not directly affected by the policy.
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.
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.