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Working Paper
Effects of credit scores on consumer payment choice
Anecdotally, a negative relationship between the use of debit cards and credit scores has been reported: Consumers with lower credit scores use debit cards more intensively than those with higher credit scores. However, it is not clear whether credit scores have real effects on consumer payment choice or whether the negative relationship is caused by other factors, such as education or income. ; If credit scores have real effects, a negative relationship between debit card use and credit scores could imply supply-side effects, demand-side effects, or a combination of both. If credit scores ...