Do consumers rely more heavily on credit cards while unemployed?
Abstract: Leading up to the Great Recession, households increased their credit card debt by over 16 percent ($121 billion) during the five-year period from 2004 to 2009. The unemployment rate simultaneously began to rise in 2008, increasing from 5.0 percent in January 2008 to a high of 10.0 percent in October of 2009. During the recovery, from 2009 to 2014, credit card debt fell by more than 25 percent, as the unemployment rate returned to near prerecession levels. These coincident developments have led to speculation that consumers facing unemployment or job uncertainty may have increased their reliance on credit cards.
Keywords: Consumer payment choice; credit cards; Survey of Consumer Payment Choice; unemployment; consumer preferences; consumer behavior;
JEL Classification: J6; D91; D12;
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Provider: Federal Reserve Bank of Boston
Part of Series: Research Data Report
Publication Date: 2016-12-20
Pages: 27 pages