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The Effects of CARD Act Disclosures on Consumers’ Use of Credit Cards

52 Pages Posted: 5 Apr 2012 Last revised: 20 Jun 2012

Lauren Eden Jones

The Ohio State University

Cäzilia Loibl

The Ohio State University - Department of Human Sciences

Sharon L. Tennyson

Cornell University - Department of Policy Analysis & Management (PAM)

Date Written: June 15, 2012

Abstract

This study uses a unique data source on consumer credit card usage to examine the impact of billing disclosure changes mandated by the Credit Card Accountability, Responsibility and Disclosure (CARD) Act on consumers’ debt payment behaviors. Data are from the Ohio State University’s Consumer Finance Monthly, which interviews a nationally representative sample of 300 to 500 households each month. The survey provides detailed data on credit card ownership, credit terms, usage, and payment behaviors, along with data on employment, income, net worth, and demographics. Estimates using data from June 2006 through December 2011 suggest that the CARD Act disclosures were effective in inducing consumers to increase the amount of credit card debt paid off each month, with the strongest effects seen in the proportion of consumers who pay off balances in full each month. Among credit card users who continue to carry debt, there is minimal evidence of behavior changes due to the new disclosures.

Keywords: Consumer finance, credit cards, consumer finance regulation

JEL Classification: D12, D18

Suggested Citation

Jones, Lauren Eden and Loibl, Cäzilia and Tennyson, Sharon L., The Effects of CARD Act Disclosures on Consumers’ Use of Credit Cards (June 15, 2012). Available at SSRN: https://ssrn.com/abstract=2034419 or http://dx.doi.org/10.2139/ssrn.2034419

Lauren Eden Jones (Contact Author)

The Ohio State University ( email )

1787 Neil Avenue
Columbus, OH 43210
United States

Cäzilia Loibl

The Ohio State University - Department of Human Sciences ( email )

1787 Neil Avenue
265K Campbell Hall
Columbus, OH 43210
United States
614-292-4226 (Phone)

Sharon L. Tennyson

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

252 MVR Hall
Ithaca, NY 14853
United States
607-255-2619 (Phone)
607-255-4071 (Fax)

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