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The COVID-19 shock and consumer credit: Evidence from credit card data.
Horvath, Akos; Kay, Benjamin; Wix, Carlo.
  • Horvath A; Federal Reserve Board, 20th Street and Constitution Avenue N.W., Washington, DC 2055, United States.
  • Kay B; Federal Reserve Board, 20th Street and Constitution Avenue N.W., Washington, DC 2055, United States.
  • Wix C; Federal Reserve Board, 20th Street and Constitution Avenue N.W., Washington, DC 2055, United States.
J Bank Financ ; 152: 106854, 2023 Jul.
Article in English | MEDLINE | ID: covidwho-2296599
ABSTRACT
We study the dynamic effect of the COVID-19 shock on credit card use in 2020. Local case incidence had a strong negative effect on credit card spending in the early months of the pandemic, which diminished over time. This time-varying pattern was driven by the fear of the virus, rather than government support programs, consistent with the "pandemic fatigue" of consumers. Local pandemic severity also had a strong effect on credit card repayments. These spending and repayment effects offset each other, resulting in no effect on credit card borrowing, consistent with credit-smoothing behavior. The local stringency of nonpharmaceutical interventions also had a negative effect on spending and repayments, albeit smaller in magnitude. We conclude that the pandemic itself was a more important driver of changes in credit card use than the public health policy response.
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Full text: Available Collection: International databases Database: MEDLINE Type of study: Observational study / Prognostic study Language: English Journal: J Bank Financ Year: 2023 Document Type: Article Affiliation country: J.jbankfin.2023.106854

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Full text: Available Collection: International databases Database: MEDLINE Type of study: Observational study / Prognostic study Language: English Journal: J Bank Financ Year: 2023 Document Type: Article Affiliation country: J.jbankfin.2023.106854