Keywords: Household debt, credit cards, credit aggregates
Abstract: Economist disagree whether the recent increase in credit card debt has been detrimental to U.S.
households. However, many rely on a measure of revolving credit published by the Federal Reserve,
which captures transactions in which a credit card is used because of its advantages over cash or
a check. An increase in debt stemming from such convenience use likely would not signal greater
financial vulnerabiltiy for households. In this paper, I present evidence that some of the
significant increase in both the level of credit card debt and its growth from 1992 to 2001 was due
to convenience use.
Full paper (456 KB PDF)
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Last update: September 28, 2004