This paper studies the sources of suboptimal allocations observed in credit card repayments using a diagnostic laboratory experiment. Using a series of treatments, we present two main findings. First, suboptimal allocations persist in extremely simple choice environments. Particularly, neither...

Using a dataset covering one quarter of the U.S. general-purpose credit card market, we document that 29% of accounts regularly make payments at or near the minimum payment. We exploit changes in issuers' minimum payment formulas to distinguish between liquidity constraints and anchoring as...

In this paper we have analyzed borrower over-indebtedness in microfinance, using multiple financial ratio based measures representing different facets of borrower-over-indebtedness namely, liquidity, debt absorption capacity and solvency of the borrowing household. Our data shows that the...

Since the late 1990s, the mean education payment-to-income ratio, a marker for the transitory burden related to student loans, has fallen steeply while repayment terms have become longer. The overall level of student debt has dramatically increased, suggesting that the level of student debt and...

Rising costs of and returns to college have led to sizeable increases in the demand for student loans in many countries. In the USA, student loan default rates have also risen for recent cohorts as labor market uncertainty and debt levels have increased. We discuss these trends as well as recent...