February 2021

The COVID-19 Shock and Consumer Credit: Proof from Credit Card Data

Akos Horvath, Benjamin Kay, and Carlo Wix


We utilize credit card facts from the Federal Reserve Board’s FR Y-14M experiences to peek the impact of the COVID-19 shock on the utilize and availability of person credit across borrower forms from March thru August 2020. We picture an preliminary vigorous decrease in credit card transactions and mighty balances in March and April. While spending begins to enhance by Can even, especially for unhealthy borrowers, balances live sorrowful total. We uncover a stable detrimental impact of local pandemic severity on credit utilize, which becomes smaller over time, per pandemic fatigue. Restrictive public health interventions additionally negatively occupy an impact on credit utilize, however the pandemic itself is the important driver. We extra picture a huge good purchase in credit card originations, especially to unhealthy borrowers. Fixed sms lån på minuttet a tightening of credit present and a flight-to-safety response of banks, we uncover an expand in curiosity charges of newly issued bank cards to much less creditworthy borrowers.

DOI: https://doi.org/10.17016/FEDS.2021.008

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February 02, 2021

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