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Program in Consumer Credit & Payments

About the Program in Consumer Credit and PaymentsAbout the Program in Consumer Credit & Payments

The program in Consumer Credit & Payments is a Bank-wide effort to advance our understanding of these markets and to make this information available to industry, consumers, policymakers, researchers, and the public at large. On these pages you will find research and analysis produced by the Bank's subject matter experts in Community Development Studies and Education, the Payment Cards Center, Research, Supervision and Regulation, and other areas.

Highlights

  • Payment Cards Center UpdatesConference Summary Released: New Perspectives on Consumer Behavior in Credit and Payments Markets

    This conference summary highlights the research presented at the Federal Reserve Bank of Philadelphia's eighth biennial conference on consumer credit and payments (October 1–2, 2015). Researchers presented the results of seven studies on topics that included the design of consumer loan contracts, the effect of consumer credit on real economic activity, the effects of government programs on household behavior during the Great Recession, and the efficacy of programs to make student loan borrowers more knowledgeable.

  • Consumer Credit and PaymentsWorking Paper Released: How Data Breaches Affect Consumer Credit

    The authors use the 2012 South Carolina Department of Revenue data breach to study consumers' responses to data breaches and related news coverage. They find that some consumers directly exposed to the breach protected themselves by monitoring their files and freezing access to their credit reports. However, these consumers continued their regular use of existing credit cards and did not switch lenders. The response of consumers exposed to the news about the breach only was negligible.
    Supersedes Working Paper 15-42.

  • Payment Cards Center UpdatesConference Announcement and Call for Papers: New Perspectives on Consumer Behavior in Credit and Payments Markets

    The Payment Cards Center and the Research Department of the Federal Reserve Bank of Philadelphia are co-organizing their ninth biennial conference focusing on new research in consumer credit and payments. The conference will be held at the Bank on Thursday, September 7, and Friday, September 8, 2017. The call for papers is available here.

  • Payment Cards Center UpdatesDiscussion Paper Released: The Secured Credit Card Market

    This paper presents a brief exposition of the history of the secured credit card and documents a series of stylized facts about the secured card market. The author uses a December 2015 cross section of the secured card market to characterize current market offerings and contrasts them with standard (unsecured) cards. He also investigates the effects of opening, and keeping open, a secured card on consumers' creditworthiness over the next two years.

What's New

April 2017

Conference Summary Released: New Perspectives on Consumer Behavior in Credit and Payments Markets

On October 1–2, 2015, the Payment Cards Center and the Research Department of the Federal Reserve Bank of Philadelphia hosted their eighth biennial conference focused on new research in consumer credit and payments. The seven papers presented during New Perspectives on Consumer Behavior in Credit and Payments Markets used new data and techniques to explore a number of longstanding questions pertaining to the design, and sometimes renegotiation, of financial contracts; the linkages between consumer credit and the real economy; the effects of government policy during the Great Recession; and the effect of timely disclosures about the cost of student loans on borrowing decisions.

March 2017

Working Paper Released: How Data Breaches Affect Consumer Credit

The authors use the 2012 South Carolina Department of Revenue data breach as a natural experiment to study how data breaches and news coverage about them affect consumers' interactions with the credit market and their use of credit. They find that some consumers directly exposed to the breach protected themselves against potential losses from future fraudulent use of stolen information by monitoring their files and freezing access to their credit reports. However, these consumers continued their regular use of existing credit cards and did not switch lenders. The response of consumers exposed to the news about the breach only was negligible.
Supersedes Working Paper 15-42.

January 2017

Conference Announcement and Call for Papers: New Perspectives on Consumer Behavior in Credit and Payments Markets

Conference dates: Thursday, September 7, and Friday, September 8, 2017
Submission deadline: June 15, 2017

The Payment Cards Center and the Research Department of the Federal Reserve Bank of Philadelphia are co-organizing their ninth biennial conference focusing on new research in consumer credit and payments.

The landscape of household finance and consumer payments is evolving rapidly, and this conference seeks to capture the latest research. 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. Additional details are available here.

November 2016

Discussion Paper Released: The Secured Credit Card Market

In this paper, the author presents a brief exposition of the history of the secured credit card, beginning with its origins in California in the 1970s. He presents a series of stylized facts based on a December 2015 cross section of the secured card market. He finds that most secured cards require an annual fee, tend not to have promotional offers or rewards, and often have higher purchase annual percentage rates than their unsecured counterparts. The author also finds that the percentage of secured card accounts in a delinquency status is more than double that of unsecured cards and that far fewer secured cards are inactive compared with unsecured cards. In addition, the annual income of secured card consumers is about 43 percent lower than unsecured card consumers. Last, he examines how the credit scores of consumers opening a secured card account change during the first two years of account history. The author finds that keeping a secured card account open is correlated with improved creditworthiness, while closing an account, either in good standing or in default, is correlated with significantly reduced creditworthiness.

  • Last update: April 10, 2017

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