Wharton Public Policy Initiative Issue Briefs
Publication Date
4-2014
Files
Download Full Text (497 KB)
Volume
2
Number
4
Document Type
Brief
Summary
Credit card minimum payments can act as an “anchor” that causes consumers to pay less of their debt than they otherwise would, leading to higher balances and interest costs, lower credit card scores, increased bankruptcy risks, and in the aggregate, suboptimally high levels of debt in the macro-economy. Policy “nudges,” which aim to increase the monthly amount that individuals pay on their credit card debt, have had mixed results.
License
This work is licensed under a Creative Commons Attribution-Noncommercial 4.0 License
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Perverse Nudges: Minimum Payments and Debt Paydown in Consumer Credit Cards
Keywords
Credit Card, debt, interest rate, score, behavioral economics
Recommended Citation
Wang, Jialan and Keys, Benjamin J., "Perverse Nudges: Minimum Payments and Debt Paydown in Consumer Credit Cards" (2014). Wharton Public Policy Initiative Issue Briefs. 25.
https://repository.upenn.edu/pennwhartonppi/25