Pub Date : 2023-09-01DOI: 10.21799/frbp.dp.2023.01
Valeria Doubinko, Tom Akana
In this paper, we explore the relationship between consumers’ use of buy now, pay later (BNPL) and their credit reports. BNPL is a deferred payment tool that allows consumers to split transactions into four payments over six weeks. Unlike many other financial products, it is offered primarily by fintech companies and advertised to consumers as free from fees and credit checks. These providers typically do not report a consumer’s use of BNPL and subsequent repayment behavior to credit bureaus, which makes studies of BNPL users’ credit more challenging. 1 In this analysis, however, we leverage a unique data set combining anonymized survey data and appended credit bureau data collected by the market research firm Competiscan, on behalf of the Consumer Finance Institute (CFI) of the Federal Reserve Bank of Philadelphia.
{"title":"How Does Buy Now, Pay Later affect Customers’ Credit?","authors":"Valeria Doubinko, Tom Akana","doi":"10.21799/frbp.dp.2023.01","DOIUrl":"https://doi.org/10.21799/frbp.dp.2023.01","url":null,"abstract":"In this paper, we explore the relationship between consumers’ use of buy now, pay later (BNPL) and their credit reports. BNPL is a deferred payment tool that allows consumers to split transactions into four payments over six weeks. Unlike many other financial products, it is offered primarily by fintech companies and advertised to consumers as free from fees and credit checks. These providers typically do not report a consumer’s use of BNPL and subsequent repayment behavior to credit bureaus, which makes studies of BNPL users’ credit more challenging. 1 In this analysis, however, we leverage a unique data set combining anonymized survey data and appended credit bureau data collected by the market research firm Competiscan, on behalf of the Consumer Finance Institute (CFI) of the Federal Reserve Bank of Philadelphia.","PeriodicalId":153516,"journal":{"name":"Discussion Papers (Federal Reserve Bank of Philadelphia)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128022464","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-02-01DOI: 10.21799/frbp.dp.2022.01
Stephanie M. Wilshusen
Abstract In response to the economic hardships stemming from COVID-19, many U.S. card-issuing banks offered measures to assist their customers who were financially affected by the pandemic. Unlike previous disaster assistance programs that were typically short in duration and localized, the COVID-19 pandemic affected millions of consumers across the country for a protracted period of time and required application of broad-based relief measures. These measures, along with federal and state stimulus and benefit payments, provided some stability to many consumers’ financial circumstances during the pandemic. It is important to consider how effective these measures have been at stabilizing consumer finances not just for those for whom these programs served as a bridge, but for those consumers who continue to need support after the programs have expired. This paper discusses several aspects of one relief measure implemented by banks during the pandemic: consumer credit card payment deferrals. Keywords: household finance, consumer credit, credit cards, payment deferral, COVID-19
{"title":"Consumer Credit Card Payment Deferrals During the COVID-19 Pandemic","authors":"Stephanie M. Wilshusen","doi":"10.21799/frbp.dp.2022.01","DOIUrl":"https://doi.org/10.21799/frbp.dp.2022.01","url":null,"abstract":"Abstract In response to the economic hardships stemming from COVID-19, many U.S. card-issuing banks offered measures to assist their customers who were financially affected by the pandemic. Unlike previous disaster assistance programs that were typically short in duration and localized, the COVID-19 pandemic affected millions of consumers across the country for a protracted period of time and required application of broad-based relief measures. These measures, along with federal and state stimulus and benefit payments, provided some stability to many consumers’ financial circumstances during the pandemic. It is important to consider how effective these measures have been at stabilizing consumer finances not just for those for whom these programs served as a bridge, but for those consumers who continue to need support after the programs have expired. This paper discusses several aspects of one relief measure implemented by banks during the pandemic: consumer credit card payment deferrals. Keywords: household finance, consumer credit, credit cards, payment deferral, COVID-19","PeriodicalId":153516,"journal":{"name":"Discussion Papers (Federal Reserve Bank of Philadelphia)","volume":"24 40","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"113973167","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-01DOI: 10.21799/frbp.dp.2021.03
Solomon Tarlin
In many advanced economies around the world, the share of transactions conducted using cash payments has been falling over the past several years. This change has likely been because of a combination of shifting consumer tastes, improvements in payment technology (specifically credit and debit cards), and the rapid growth of online transactions. As the decline in the cash share has led to some businesses choosing not to accept cash payments, many policymakers have discussed interventions to ensure access to the modern economy for consumers who prefer to pay in cash. Despite the reduced use of cash as a means of payment, currency in circulation has continued to increase in many countries, including the United States. This increase suggests that cash is still providing utility as a store of value. This paper surveys literature and data on the use of cash as a means of payment and discusses how and why the cash share is falling in the United States and around the world. Furthermore, it also discusses the opportunities and challenges of a transition away from cash for consumers, businesses, and society.
{"title":"The Future of Cash","authors":"Solomon Tarlin","doi":"10.21799/frbp.dp.2021.03","DOIUrl":"https://doi.org/10.21799/frbp.dp.2021.03","url":null,"abstract":"In many advanced economies around the world, the share of transactions conducted using cash payments has been falling over the past several years. This change has likely been because of a combination of shifting consumer tastes, improvements in payment technology (specifically credit and debit cards), and the rapid growth of online transactions. As the decline in the cash share has led to some businesses choosing not to accept cash payments, many policymakers have discussed interventions to ensure access to the modern economy for consumers who prefer to pay in cash. Despite the reduced use of cash as a means of payment, currency in circulation has continued to increase in many countries, including the United States. This increase suggests that cash is still providing utility as a store of value. This paper surveys literature and data on the use of cash as a means of payment and discusses how and why the cash share is falling in the United States and around the world. Furthermore, it also discusses the opportunities and challenges of a transition away from cash for consumers, businesses, and society.","PeriodicalId":153516,"journal":{"name":"Discussion Papers (Federal Reserve Bank of Philadelphia)","volume":"193 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125974272","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-10-01DOI: 10.21799/frbp.dp.2020.05
R. Darolia, A. Sullivan
Student loan servicers play a critical and underappreciated role in federal student oan programs. The federal government contracts out to servicers an array of many of the most critical functions related to student loan repayment, including account management, payment processing, and the provision of information about payment plans and solutions for distressed borrowers. In fact, most borrowers’ interactions with federal student loan repayment are almost exclusively with their servicer. We aim to improve upon the scarce research literature about federal student loan servicers by exploring the complicated set of measures that determine how servicers are compensated for servicing each debtor and awarded portfolios for future business. The coverage and construction of these measures influence servicers’ behaviors by creating strong incentives that coincide to varying degrees with the goals of the government, public, student loan borrowers, and the servicers themselves. Understanding accountability and incentives in current and past contracts is critical as the U.S. Department of Education reforms servicer contracts and responsibilities through its Next Gen Federal Student Aid initiative.
{"title":"Federal Student Loan Servicing Accountability and Incentives in Contracts","authors":"R. Darolia, A. Sullivan","doi":"10.21799/frbp.dp.2020.05","DOIUrl":"https://doi.org/10.21799/frbp.dp.2020.05","url":null,"abstract":"Student loan servicers play a critical and underappreciated role in federal student oan programs. The federal government contracts out to servicers an array of many of the most critical functions related to student loan repayment, including account management, payment processing, and the provision of information about payment plans and solutions for distressed borrowers. In fact, most borrowers’ interactions with federal student loan repayment are almost exclusively with their servicer. We aim to improve upon the scarce research literature about federal student loan servicers by exploring the complicated set of measures that determine how servicers are compensated for servicing each debtor and awarded portfolios for future business. The coverage and construction of these measures influence servicers’ behaviors by creating strong incentives that coincide to varying degrees with the goals of the government, public, student loan borrowers, and the servicers themselves. Understanding accountability and incentives in current and past contracts is critical as the U.S. Department of Education reforms servicer contracts and responsibilities through its Next Gen Federal Student Aid initiative.","PeriodicalId":153516,"journal":{"name":"Discussion Papers (Federal Reserve Bank of Philadelphia)","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122476549","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：