Wharton Pension Research Council Working Papers

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Working Paper

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This chapter examines patterns of financial choices by a credit union’s members using transaction-level administrative data on checking, savings, and line-of-credit (LOC) accounts. We observe substantial payday loan use when cheaper sources of liquidity are available, resulting in average interest losses of about $88 over six and a half months. In addition, we find much higher levels of transaction activity by payday borrowing members than by other members, at half the average transaction dollar magnitude. These results are consistent with previous work identifying financial stress and decision-making challenges


The published version of this Working Paper may be found in the 2011 publication: Financial Literacy: Implications for Retirement Security and the Financial Marketplace.

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Copyright/Permission Statement

Opinions and conclusions are solely those of the author(s) and do not reflect views of the institutions supporting the research, with whom the authors are affiliated, or the Pension Research Council. Copyright 2010 © Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.

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Economics Commons



Date Posted: 07 August 2019