Contract Terms, Employment Shocks, and Default in Credit Cards

• 成果类型: Article
• 署名作者: Castellanos, Sara G.; Jimenez-Hernandez, Diego; Mahajan, Aprajit; Alcaraz Prous, Eduardo; Seira, Enrique
• 署名单位: Bank of Mexico; Federal Reserve System - USA; Federal Reserve Bank - Chicago; University of California System; University of California Berkeley; National Bureau of Economic Research; Instituto Mexicano del Seguro Social; University of Notre Dame
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdaf079
• 发表日期: 2026
• 关键词: liquidity constraints; earnings losses; self-control; INFORMATION; debt; CONSEQUENCES; unemployment; insurance; selection

摘要

Regulatory concerns over a tension between expanding financial access and limiting default have led to significant restrictions on contract terms in a number of countries, despite limited evidence on their effectiveness. We use a large nation-wide RCT to examine new borrower responses to changes in interest rates and minimum payments for a credit card that accounted for 15% of all first-time formal loans in Mexico. Default rates were 19% over the 26 month experiment and a 30 pp decrease in interest rates decreased default by 2.5 pp with no effects on the newest borrowers. Doubling minimum payments increased default by 0.8 pp during the experiment but reduced it by 1 pp afterwards, possibly by reducing debt. Matching the experimental sample to their formal employment histories we find that the effect of job separation-more common among new borrowers-on default is seven times larger than the effect of the 30 pp interest rate change. We provide a simple framework for interpreting the experimental results, and rationalize the smaller contract term effects by their limited effects on cash flow rather than by differences in per-peso impacts.