Credit card behavior,financial styles,and heuristics

The paper makes four contributions. First, the paper provides new data and findings about credit card usage segmentation in respect to spending and borrowing behavior. Second, it sets the new findings against the backdrop of the newly emerging literature on financial literacy. A great variability occurs in financial literacy across American consumers. Third, the paper describes fast and frugal heuristics aimed to help consumers make effective, and in some cases better, budgeting decisions when they use credit cards. Fourth, the paper describes the introduction of a new set of online financial tools, offered by a large credit card company, which consumers are now using to make decisions about their spending and borrowing, and links these tools to the heuristics under discussion. Fast and frugal heuristics are likely to be especially valuable to consumers with low confidence in their online skills. Notably, 25% of credit cardholders report that they have low confidence using online technology to manage their finances, with the corresponding figure being 44% for those most at risk.     

‘Credit Constraints and Determinants of the Cost of Capital in Vietnamese Manufacturing’

This paper examines the extent to which borrowing constraints restrict firm access to credit and identifies individual, firm, and loan characteristics, which determine the cost of capital in Vietnamese manufacturing. Using direct information from a Vietnamese enterprise survey the paper shows that between 14 and 25% of the enterprises are credit constrained, and these enterprises would increase their debt holdings by between 40 and 115% if borrowing constraints were relaxed. Moreover, it emerges that informal credit markets play an important role for fast growing firms. Enterprises do not appear to have the necessary time to go through the many administrative difficulties in the formal credit system if they want to “seize the day”. Finally, collateralized loans face larger interest rates, explained by the significant influence of “policy lending” in Vietnamese credit markets.     

Financial literacy and high‐cost borrowing: Exploring the mechanism

Recent studies have suggested that financial literacy is an important determinant of informed borrowing decisions. Despite the evidence that financially literate consumers are less likely to use alternative financial services, the mechanism through which financial literacy discourages demand for alternative financial services has yet to be fully understood. The previous studies proposed several explanations, such as the ability to undertake complex financial calculations and understand contract terms, to link financial literacy to savvy credit choices. This study evaluates the validity of this argument by examining whether or not financial knowledge plays a greater role in borrowing decisions where consumers are forced to rely on financial knowledge. It is assumed that consumers in an information‐sparse environment have a greater incentive to utilize financial knowledge to infer the hidden cost of borrowing contracts. To test this argument, this study examines the extent to which information availability moderates the negative impact of financial knowledge on rent‐to‐own transactions. Information content is captured by state‐level disclosure mandates for rental contracts, given that consumer in a loosely regulated state are exposed to less pricing information. The results illustrate that limited information strengthens the negative association between financial knowledge and rent‐to‐own transactions. This confirms the previous arguments that consumers are active thinkers who refer to financial knowledge to estimate the overall cost of borrowing.     

较发达地区农户参与农信社小额信贷程度的影响因素分析——基于苏北金湖农户“直接意愿”调查的实证检验

结合农户借贷行为特征,采用江苏省金湖县273个农户实地调查数据,通过基于"直接意愿调查法"的二元Probit模型,从需求和供给两方面实证分析中国较发达地区农户小额信用贷款的现状及影响因素,结果显示,外出务工人数、农村家庭大额非日常支出、农户人际关系的强弱和正规社会资本资源显著影响农户小额信贷的需求,而非农收入比重、农户兼业类型及地区人均贷款显著影响农户获得小额信贷的概率。因此,重视和挖掘农户潜在信贷需求,改进信贷产品服务和质量,满足农户多样化的资金需求,才是实现农村小额信贷的可持续发展之道。     

Small‐Dollar Credit Lending: The Effect of Financial Burden on Personal Asset Misvaluation

Small‐dollar credit lenders offer consumers quick access to cash in the form of products, such as pawn loans. The consumers who tend to use these small‐dollar credit products are more likely to face financial burden and potential for default—particularly when loan‐to‐value ratios are high. However, the cognitive effects of financial burden can impair financial decision making. If financial literacy educators are to empower consumers, more consumer‐centric evidence is necessary to determine how small‐dollar credit consumers make decisions when purchasing loans. One critical decision consumers make is accepting how lenders value their assets in exchange for credit. Three lab studies assess how consumers facing financial burden value their own assets. We find that, due to cognitive constraints of financial burden, consumers can undervalue functional assets and overvalue symbolic assets. Importantly for financial literacy efforts, however, we show that framing a symbolic asset in terms of other‐benefit construal helps attenuate asset overvaluation.     

信用风险缓释工具对商业银行贷款定价之影响

本文基于我国上市公司的银行贷款数据,就信用风险缓释工具对商业银行贷款定价的影响进行了多视角的研究,发现只有抵押贷款和非抵押贷款的风险溢价间存在显著差异,且信用贷款和保证贷款的风险溢价显著小于抵押贷款。我国商业银行似乎对更高质量的风险缓释工具执行了较高的贷款利率,表明信用风险缓释工具在其贷款风险定价中未能得到应有的体现与反映。我国商业银行对抵押等工具的风险缓释作用的漠视,是与其特定的风险定价与激励机制有关;同时,基于供应链小企业融资中的过程控制等结构化设计等,讨论了如何降低抵押贷款风险溢价的方式和方法。     

Brett Williams. Debt for Sale: A Social History of the Credit Trap. Philadelphia: University of Pennsylvania Press, 2004. 154 pp. ISBN 0-8122-3817-6, $24.95 (cloth).

This volume covers a social history of modern consumer credit,specifically, credit card debt, pawnshops, and storefronts thatoffer check-cashing services and paycheck loans. Consumer creditis largely a product of the past half century. Diners Club issuedits first credit cards in 1951, and Carte Blanche, AmericanExpress, and other entities soon followed suit. In the 1970sthe advent of computers and the deregulation of banking resultedin an explosion in the use of credit cards. Initially, credit     

美国次贷危机对我国房地产证券法律监管的启示

房地产抵押贷款证券化是20世纪以来最重要的金融创新,主要是指把流动性差的个人房屋抵押贷款通过信用增级转换成可以在二级市场自由流动的证券的过程.2007年美国次贷危机爆发并迅速波及全球,使得世界各国的金融机构遭到重创,房地产次级抵押贷款危机形成.我国从房地产抵押贷款证券化试点到现在,经过几年的发展取得了一些成就,但就目前而言,我国相关的法律监管体制不足以保证我国房地产抵押贷款证券化安全高效进行,基于美国次贷危机的启示,我国房地产抵押贷款证券化的法律监管还有待进一步完善.     

Trade credit and bank finance: Financing small firms in russia

This paper argues that Russian financial markets are more developed than typically supposed. I show that non-financial firms, suppliers of credit to other firms, support the role of financial intermediaries in helping to surmount problems of information asymmetries. Trade credit works as a signal; firms receiving it obtain access to bank loans. I test this hypothesis using data from my survey of 352 firms in Russia in 1995. Firms using trade credit are shown to have a higher probability of acquiring bank credit.     

How Does Financial Literacy Impact Attitude Toward Student Loan Providers?

ABSTRACT

We examined whether financial literacy changes college students' assessments of their student-loan providers. As predictors in our backward regression, we included (a) financial literacy, (b) perceived importance of loan, (c) satisfaction with college, (d) financial optimism, (e) experience using credit cards, and (f) perceived importance of decisions about credit cards. We also included two-way interactions between financial literacy and the other variables. Our regression explained about 24% of the variance in the dependent variable. Our results indicated that financial literacy was a significant predictor of attitude toward the student loan provider—but only in the interaction terms.     

The trade credit channel revisited: evidence from micro data of Japanese small firms

It is suggested that trade credit can be a substitute for bank loans for small- and medium-sized enterprises (SMEs) that have little access to external funding sources. Using unique cross-sectional survey data of Japanese SMEs, we conduct a deep investigation into the substitutability between bank loans and trade credit. This survey contains rich information on the suppliers of trade credit to SMEs, thus enabling the examination of the channel through which credit is provided from suppliers to customers. We find that SMEs with little access to bank credit depend more on large suppliers for trade credit. We also find that when a purchase is made from a large supplier, more credit is indeed provided in the form of trade credit. Furthermore, this channel of credit from large suppliers to SMEs is only observed for solvent customers, not for insolvent customers. Our findings suggest that trade credit plays an important role for entrepreneurial firms over the financial growth cycle. For young and small firms with little access to bank loans trade credit is an important funding source.     

The effects of financial literacy on the borrowing behaviour of Turkish financial consumers

Our research attempts to measure the effects of financial literacy of Turkish financial consumers on the borrowing behaviour. A questionnaire is administered to a sample of 550 people in the city of Eskisehir. In‐depth interviews are undertaken with 10 financial consumers to support the findings. Findings of the study indicate differences in the borrowing behaviour of consumers with different levels of financial literacy. Considering the relationship between financial literacy and borrowing behaviour, we suggest that attempts to increase financial literacy of financial consumers may have important implications in the prevention of excessive borrowing.     

Banking relationship and default priority in consumer credit: Evidence from Thai microdata

Banks play an important role in consumer credit, and when borrowers face a decision on whether to default on mortgage or non-mortgage loans first, banking relationship may matter. Our study provides first evidence into the interplay between banking relationship and consumer default priority via credit bureau data of 1 million individuals in Thailand. We find that same-bank borrowers are less likely to default on mortgage loans first, and borrowers with longer banking relationship and lower switching cost are more likely to default on mortgage loans first (which is welfare-improving). Our results suggest that banking relationship can lead to better outcomes for defaulting borrowers even when switching cost is high.     

Credit Cards: Transactional Convenience or Debt‐Trap?

We survey individuals on their credit card usage. Contrary to popular press, most credit card holders use credit cards in a responsible manner. They tend to use credit cards for transaction convenience and pay little interest. Only a minor subset of people uses credit cards to access expensive credit, with only 7% of credit card holders in our sample never paying the balance in full. Credit card debt is more common among older, less financially literate, and less trusting respondents. Even individuals with credit card debt are well aware about its costs and are likely to make informed financial choices.     

The determinants of households’ repayment difficulties on mortgage loans: evidence from Italian microdata

This article investigates the main determinants of households’ repayment difficulties on mortgage loans in Italy. We contribute to the empirical literature on household financial vulnerability by assessing the joint impact of socio‐demographic factors, loan characteristics and institutional variables on the likelihood of mortgage insolvency and on the intensity of arrears. Using data from the Italian component of the 2008 European Union‐Statistics on Income and Living Conditions (EU‐SILC) survey, we firstly identify which types of households are more vulnerable to unexpected adverse events that may trigger repayment difficulties. Specifically, households whose head is young, unemployed or immigrant show a higher probability of arrears and emerge as those suffering more from the adverse economic conditions connected to the crisis. Moreover, household repayment behaviour is affected by mortgage characteristics and, in particular, having modified contract terms significantly increases current arrears probability. Finally, regional institutional and credit market factors mainly impact on the conditional intensity of arrears. This evidence suggests that, although repayment difficulties mainly arise from a genuine inability to repay, households are less likely to pay on time when institutions are less effective at punishing default, confirming the existence of some strategic behaviour.     

Do types of foreign capital matter for income equality?

We investigate the link between financial integration and income inequality, suggesting that different channels of financial integration have contrasting distributional effects. Using an unbalanced panel of 65 countries from 1992 to 2015 and employing dynamic panel data methods, we find that greater financial integration through debt-creating capital increases income inequality compared to equity-type capital. Furthermore, a larger share of direct investment in financial integration is associated with lower income inequality; the converse is true for loans and credit, while the share of portfolio investment has no significant effect when considered as a whole. Evidence also shows that increased financial integration and trade is beneficial for reducing the income inequality of emerging economies.     

加强金融政策扶持促进中小企业融资

我国政府在金融危机之后果断出台了促进中小企业发展的相关政策,在财税、信贷等方面给予了大力支持。但中小企业融资形势依然严峻,必须在此基础上加大政府的金融支持力度,不断探索、创新管理模式,建立政策性担保机构以及政策性再担保机构,建立风险补偿机制和政策性保险机制,调整贷款抵质押方式,提高中小企业直接融资比重等。     

Impact of Financial Education Mandates on Younger Consumers' Use of Alternative Financial Services

Over one‐quarter of American adults used credit‐based alternative financial services (AFS) in the past five years, which carry a typical APR of 300%. Young adults are especially more likely to use AFS yet are also more likely to be exposed to personal finance education in schools. In this study, I use data from pooled 2012 and 2015 waves of National Financial Capability Study to examine whether state‐mandated financial education impacts young adults' use of AFS. I find that financial education mandates significantly reduced the likelihood and frequency of payday borrowing in particular. Additionally, I show that exposure to required personal finance courses could affect payday borrowing through increased financial literacy and improved financial planning practices. These findings suggest that policymakers and other stakeholders need to understand the full benefits of financial education when making cost–benefit analysis comparisons as to whether or not to implement.     

The Winner’s Curse of Human Capital

We extend a model developed by Evans and Jovanovic (1989) to explain when start-ups are credit constrained. We show that the magnitude of the credit constraint is conditioned by the relative productivity of human capital in both wage work and self-employment. The effect of predicted household income on start-up capital is used to indicate the existence of financial constraint. Empirical analysis reveals that entrepreneurs with high human capital have both greater financial wealth and greater levels of start-up capital pointing to the endogenous nature of credit constraints. High human capital relaxes financial constraints, apparently due to greater productivity of human capital in wage work than in self-employment. Those who are the least likely to be credit constrained in self-employment are those that are least likely to switch into self-employment,and vice versa.     

我国商业银行个人住房抵押贷款风险分析——美国次贷危机对我国的启示

当中国的个人贷款发展如火如荼的时候,美国的次级债市场却危机四伏,并蔓延开来。观察美国次级贷款危机,对比一下中国的住房抵押贷款市场,有很多值得吸取的教训和值得借鉴的经验,加强对个人住房抵押贷款风险的防范十分必要。当前的主要任务是积累和完善数据资源,建立和提高个人住房抵押贷款风险管理的定量化分析技术水平,以便定量评估具有中国持征的个人住房抵押贷款的风险度。此外,还要强化对个人住房抵押贷款风险管理的政策支持,并将住房从完全市场化回归民生本质。