Borrowing on the Wrong Credit Card? Evidence from Mexico

• 成果类型: Article
• 署名作者: Ponce, Alejandro; Seira, Enrique; Zamarripa, Guillermo
• 署名单位: Instituto Tecnologico Autonomo de Mexico
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20120273
• 发表日期: 2017
• 页码: 1335-1361
• 关键词: consumer choice; DEBT PUZZLE; SALIENCE; MARKET; fungibility; liquidity; literacy; accounts; rates

摘要

We establish new facts about the way consumers allocate debt among their credit cards using data for a representative sample of card-holders in Mexico. We find that relative prices are weak predictors of the allocation of debt, purchases, and payments. Consumers allocate a large fraction of their debt to high-interest cards, incurring a cost of 31 percent above the minimum. Using an experiment, we find that consumers do not substitute in the price margin, although they respond to salient temporary low-interest offers. We conclude that limited attention and mental accounting best rationalize our results and discuss implications for the market.