How Do Consumers Avoid Penalty Fees? Evidence from Credit Cards

References

• Adams P , Guttman-Kenney B , Hayes L , Hunt S , Laibson D , Stewart N (2018) The semblance of success in nudging consumers to pay down credit card debt. Occasional Paper 45, Financial Conduct Authority, London.Google Scholar
• Agarwal S , Rosen RJ , Yao V (2016) Why do borrowers make mortgage refinancing mistakes? Management Sci. 62(12):3494–3509.Link, Google Scholar
• Agarwal S , Skiba PM , Tobacman J (2009) Payday loans and credit cards: New liquidity and credit scoring puzzles? Amer. Econom. Rev. 99(2):412–417.Crossref, Google Scholar
• Agarwal S , Chomsisengphet S , Mahoney N , Stroebel J (2015) Regulating consumer financial products: Evidence from credit cards. Quart. J. Econom. 130(1):111–164.Crossref, Google Scholar
• Agarwal S , Driscoll JC , Gabaix X , Laibson D (2008) Learning in the credit card market. NBER Working Paper No. 13822, National Bureau of Economic Research, Cambridge, MA.Google Scholar
• Agnew J , Balduzzi P , Sundén A (2003) Portfolio choice and trading in a large 401(k) plan. Amer. Econom. Rev. 93(1):193–215.Crossref, Google Scholar
• Alan S , Cemalcılar M , Karlan D , Zinman J (2018) Unshrouding: Evidence from bank overdrafts in Turkey. J. Finance 73(2):481–522.Crossref, Google Scholar
• Allcott H , Rogers T (2014) The short-run and long-run effects of behavioral interventions: Experimental evidence from energy conservation. Amer. Econom. Rev. 104(10):3003–3037.Crossref, Google Scholar
• Andersen S , Campbell J , Nielsen KM , Ramadorai T (2015) Inattention and inertia in household finance: Evidence from the Danish mortgage market. NBER Working Paper No. 21386, National Bureau of Economic Research, Cambridge, MA.Google Scholar
• Ater I , Landsman V (2013) Do customers learn from experience? Evidence from retail banking. Management Sci. 59(9):2019–2035.Link, Google Scholar
• Ausubel LM (1991) The failure of competition in the credit card market. Amer. Econom. Rev. 81(1):50–81.Google Scholar
• Becker GS (1976) The Economic Approach to Human Behavior (University of Chicago Press, Chicago).Crossref, Google Scholar
• Bilias Y , Georgarakos D , Haliassos M (2010) Portfolio inertia and stock market fluctuations. J. Money Credit Banking 42(4):715–742.Crossref, Google Scholar
• Brunnermeier MK , Nagel S (2008) Do wealth fluctuations generate time-varying risk aversion? Micro-evidence on individuals’ asset allocation. Amer. Econom. Rev. 98(3):713–736.Crossref, Google Scholar
• Calvet LE , Campbell JY , Sodini P (2009) Fight or flight? Portfolio rebalancing by individual investors. Quart. J. Econom. 124(1):301–348.Crossref, Google Scholar
• Carlin B , Olafsson A , Pagel M (2017) FinTech adoption across generations: Financial fitness in the information age. NBER Working Paper No. 23798, National Bureau of Economic Research, Cambridge, MA.Google Scholar
• Chetty R , Friedman JN , Saez E (2013) Using differences in knowledge across neighborhoods to uncover the impacts of the EITC on earnings. Amer. Econom. Rev. 103(7):2683–2721.Crossref, Google Scholar
• Choi JJ , Laibson D , Madrian BC , Metrick A (2002) Defined contribution pensions: Plan rules, participant choices, and the path of least resistance. Poterba J , ed. Tax Policy and the Economy , vol. 16 (MIT Press, Cambridge, MA), 67–114.Crossref, Google Scholar
• Choi JJ , Laibson D , Madrian BC , Metrick A (2004) For better or for worse: Default effects and 401(k) savings behavior. Wise DA , ed. Perspectives on the Economics of Aging , vol. 401 (University of Chicago Press, Chicago) 81–126.Crossref, Google Scholar
• DellaVigna S , Malmendier U (2006) Paying not to go to the gym. Amer. Econom. Rev. 96(3):694–719.Crossref, Google Scholar
• Federal Reserve Bank of Boston (2014) 2014 survey of consumer payment choice. Report, Federal Reserve Bank of Boston, Boston. Google Scholar
• Financial Conduct Authority (2016) Credit card market study: Final findings report. Technical Report No. MS14/6.3, Financial Conduct Authority, London.Google Scholar
• Gathergood J , Mahoney N , Stewart N , Weber J (2019) How do individuals repay their debt? The balance-matching heuristic. Amer. Econom. Rev. 109(3):844–875.Crossref, Google Scholar
• Godlonton S , Thornton RL (2013) Learning from others’ HIV testing: Updating beliefs and responding to risk. Amer. Econom. Rev. 103(3):439–444.Crossref, Google Scholar
• Gross DB , Souleles NS (2002) Do liquidity constraints and interest rates matter for consumer behavior? Evidence from credit card data. Quart. J. Econom. 117(1):149–185.Crossref, Google Scholar
• Grubb MD , Osborne M (2015) Cellular service demand: Biased beliefs, learning, and bill shock. Amer. Econom. Rev. 105(1):234–271.Crossref, Google Scholar
• Hanna R , Schwartzstein J , Mullainathan S (2014) Learning through noticing: Theory and evidence from a field experiment. Quart. J. Econom. 129(3):1311–1353.Crossref, Google Scholar
• Hastings J , Shapiro JM (2018) How are snap benefits spent? Evidence from a retail panel. Amer. Econom. Rev. 108(12):3493–3540.Crossref, Google Scholar
• Jørring A (2018) The costs of financial mistakes: Evidence from U.S. consumers. Working paper, University of Chicago, Chicago.Google Scholar
• Karlan D , McConnell M , Mullainathan S , Zinman J (2016) Getting to the top of mind: How reminders increase saving. Management Sci. 62(12):3393–3411.Link, Google Scholar
• Keys B , Wang J (2019) Minimum payments and debt paydown in consumer credit cards. J. Financial Econom. 131(3):528–548.Crossref, Google Scholar
• Liberman A (2016) The value of a good credit reputation: Evidence from credit card renegotiations. J. Financial Econom. 120(3):644–660.Crossref, Google Scholar
• Madrian BC , Shea DF (2001) The power of suggestion: Inertia in 401(k) participation and savings behavior. Quart. J. Econom. 116(4):1149–1187.Crossref, Google Scholar
• Meier S , Sprenger C (2010) Present-biased preferences and credit card borrowing. Amer. Econom. J. Appl. Econom. 2(1):193–210.Crossref, Google Scholar
• Mian A , Sufi A (2009) The consequences of mortgage credit expansion: Evidence from the us mortgage default crisis. Quart. J. Econom. 124(4):1449–1496.Crossref, Google Scholar
• Miravete EJ (2003) Choosing the wrong calling plan? Ignorance and learning. Amer. Econom. Rev. 93(1):297–310.Crossref, Google Scholar
• Miravete EJ , Palacios-Huerta I (2014) Consumer inertia, choice dependence, and learning from experience in a repeated decision problem. Rev. Econom. Statist. 96(3):524–537.Crossref, Google Scholar
• Office for National Statistics (2015) Wealth in Great Britain wave 4: 2012 to 2014. Report, Office for National Statistics, London. Google Scholar
• Palley AB , Kremer M (2014) Sequential search and learning from rank feedback: Theory and experimental evidence. Management Sci. 60(10):2525–2542.Link, Google Scholar
• Ponce A , Seira E , Zamarripa G (2017) Borrowing on the wrong credit card: Evidence from Mexico. Amer. Econom. Rev. 107(4):1335–1361.Crossref, Google Scholar
• Ru H , Schoar A (2016) Do credit card companies screen for behavioral biases? NBER Working Paper No. 22360, National Bureau of Economic Research, Cambridge, MA.Google Scholar
• Sakaguchi H , Stewart N , Gathergood J (2018) When setting a default payment harms credit card holders. Working paper, University of Warwick, Coventry, UK.Google Scholar
• Simonsohn U , Simmons J , Nelson L (2015) Specification curve: Descriptive and inferential statistics on all reasonable specifications. Working paper, The Wharton School, University of Pennsylvania, Philadelphia.Google Scholar
• Stango V , Zinman J (2009) What do consumers really pay on their checking and credit card accounts? Explicit, implicit, and avoidable costs. Amer. Econom. Rev. 99(2):424–429.Crossref, Google Scholar
• Stango V , Zinman J (2014) Limited and varying consumer attention: Evidence from shocks to the salience of bank overdraft fees. Rev. Financial Stud. 27(4):990–1030.Crossref, Google Scholar
• Sussman A , Bartels D (2018) Anchors or targets? An examination of credit card statements. Working paper, University of Chicago, Chicago.Google Scholar