Credit Card Selection Criteria: Singapore Perspective

This study used factor analysis to examine credit card selection criteria among Singaporeans. The results showed that convenience of use and protection, economics, and flexibility were the main drivers, while the reputation of card was the least important in determining credit card selection in Singapore. Demographic results showed that high-income earners, the better educated, the elderly, married and the professional preferred the convenience-protection factor to the economic-promotional factor. Females were shown to value the promotional factor more, while males preferred the economic factor. The ethnic Malays placed a greater emphasis on the economic factor than did the ethnic Chinese. The results also showed that the number of credit card owned in Singapore is positively related to education, income, age group, and marital status. Those holding a single credit card stressed the economic factor more than those holding many cards. In Singapore, the higher income earners, the better educated, older adults, females, married, and both Chinese and Indians are more receptive to paying their monthly credit card balances in full. The results demonstrated that Singaporeans do not view the credit card selection criteria much differently from respondents from other developing and advanced nations.credit card selection, credit card usage, banking regulation, factor analysis

Dissecting saving dynamics: measuring wealth, precautionary, and credit effects

We argue that the U.S. personal saving rate’s long stability (1960s–1980s), subsequent steady decline (1980s–2007), and recent substantial rise (2008–2011) can be interpreted using a parsimonious ‘buffer stock’ model of consumption in the presence of labor income uncertainty and credit constraints. Saving in the model is affected by the gap between ‘target’ and actual wealth, with the target determined by credit conditions and uncertainty. An estimated structural version of the model suggests that increased credit availability accounts for most of the long-term saving decline, while fluctuations in wealth and uncertainty capture the bulk of the business-cycle variation

U.S. Household Savings for Retirement in 2010

[Excerpt] This report provides data on a variety of household wealth measures in 2010 from the Federal Reserve’s triennial Survey of Consumer Finances. Although the amount of retirement assets is the primary focus of the report, other measures of wealth (such as the amount of total assets, financial assets, total debt, net worth, and housing equity) are also included. The report classifies the amount of assets and debt by the age of the head of the household for both single and married households. In general, the amount of household wealth is higher for married households than for single households. Household wealth generally increases as the age of the head of the household increases, although some measures decrease for those households in which the head of the household is aged 75 or older. In general, the median values are less than the average values, which is an indication that some households hold relatively large amounts of wealth compared with most households

Profiles, Use, and Perceptions of Singapore Multiple Credit Cardholders

This study analyzes Singapore’s diverse cardholders in search of variations among demographic groups, credit card profiles, and their perceptions with regards to credit card ownership and use, it then discusses possible reasons governing Singaporeans’ credit card ownership and use. A survey was conducted (n = 636), decision trees were then constructed using Chi-square automatic interaction detection algorithm (CHAID) and SPSS software AnswerTree to examine the association between the number of credit cards (target variable) and the demographic characteristics, perceptions and other credit card related variables. The number of credit cards was found to be significantly influenced by income and gender as well as perceptions that include “credit card leads to overspending”, “savings as payment source”, “unreasonable interest rates”, “credit card as status symbol”. The number of credit cards was also affected by credit card related variables such as missing payments sometimes, frequency of use, entertainment expenditures, and petrol purchase. This research provides an in-depth understanding of Singaporean multiple cardholders, thus it is useful in designing marketing strategies for card-issuers as well as anti-debt strategies for policy-makers in Singapore. Despite the importance of consumer credit, virtually no literature or research exists on the ownership and use of credit cards in Singapore, so this paper intends to close this gap. Further, by combining the demographics, cardholders’ profiles and usage patterns with the respondents’ perceptions concerning credit card ownership and use, our study offers a richer analysis to explain consumer behavior than previous literatures.Credit card ownership, credit card use, credit revolving, credit debts, decision tree, Singapore

Inflation and the Consumer

macroeconomics, consumer, inflation

Market Power in Outputs and Inputs: An Empirical Application to Banking

This paper provides evidence on the empirical separability of input and output market imperfections. We specify a model of banking competition and simultaneously estimate bank conduct in output (loan) and input (deposit) markets. Our results suggest that firms display some degree of noncompetitive behavior in both the loan and the deposit markets. Moreover, we find that the input side and the output side are empirically separable, that is the measurement of market power on one side of the market is not affected by assuming that the other side of the market is perfectly competitive. Our results suggest that empirical studies of market power that concentrate on either the input side or the output side, are not subject to significant misspecification error. ZUSAMMENFASSUNG - (Marktmacht auf Input- und Outputmärkten: Eine Empirische Anwendung auf den Bankensektor) Der Aufsatz untersucht den Zusammenhang von Unvollkommenheiten auf Input- und auf Outputmärkten. Im Rahmen eines Wettbewerbsmodells für den Bankensektor wird die Wechselwirkung zwischen Outputmarkt, d.h. bei der Kreditvergabe, und Inputmarkt (Geldanlage) empirisch untersucht. Die Ergebnisse zeigen, dass Banken auf beiden Seiten des Marktes eine gewisse Marktmacht ausüben können. Allerdings ist die Wechselwirkung begrenzt, sodass eine separate Betrachtungsweise von Input- und Outputmärkten möglich ist. Dies bedeutet wiederum, dass empirische Untersuchungen, die jeweils nur eine Seite des Marktes analysieren, keinen signifikanten Verzerrungen unterliegen.Measuring Market Power, Banking

Building Economic Security in America's Cities: New Municipal Strategies for Asset Building and Financial Empowerment

Outlines city governments' role in poverty alleviation and emerging financial empowerment strategies, including better access to supports and tax credits; safe, affordable financial products and services; and opportunities to leverage savings into assets

A Portfolio View of Consumer Credit

To compute risk-adjusted returns and gauge the volatility of their portfolios, lenders need to know the covariances of their loans' returns with aggregate returns. Cross-sectional differences in these covariances also provide insight into the nature of the shocks hitting different types of consumers. We use a unique panel dataset of credit bureau records to measure the 'covariance risk' of individual consumers, i.e., the covariance of their default risk with aggregate consumer default rates, and more generally to analyze the cross-sectional distribution of credit, including the effects of credit scores. We obtain two key sets of results. First, there is significant systematic heterogeneity in covariance risk across consumers with different characteristics. Consumers with high covariance risk tend to also have low credit scores (high default probabilities). Second, the amount of credit obtained by consumers significantly increases with their credit scores, and significantly decreases with their covariance risk (especially revolving credit), though the effect of covariance risk is smaller in magnitude.

Deregulation, Tax Reform, and the Use of Consumer Credit

This article analyzes the probable effects of recent deregulation of consumer credit markets and tax reform on household credit-use decisions. The results of the analysis suggest that deregulation of rates of charge for consumer credit contracts accounts for a substantial portion of the increase in consumer credit outstanding relative to household income since 1982. The effect would not originate from the extention of credit in newly deregulated markets to households that had not been able to get credit before (widening of credit use). Rather, it would come from the provision of greater amounts of credit to borrowers in general (deepening of credit use). With regard to tax reform, the probability of debt use is significantly higher for those households most likely to itemize deductions for federal income tax purposes. Holding the level of interest rates constant, tax reform that removes the deductibility of consumer interest is not expected to affect the amount of credit used relative to income but is expected to have a significant effect on the type of debt used by such households. They will likely be early adopters of home equity lines of credit. Their shift from consumer to mortgage credit is expected to have a long-term negative effect on the credit quality of consumer credit portfolios

Bounds on repayment behavior: evidence for the consumer credit market

How does the punishment for default affect repayment behavior? We use administrative data, provided by the leading Italian lender of unsecured credit to the household sector, to analyze households repayment behavior. Administrative data are particularly well suited to study what factors are responsible for default, but raise a fundamental econometric problem, since they identify the determinants of repayment behavior only for those who are granted credit. To overcome this problem, we provide upper and lower bounds on the determinants of repayment behavior. Moreover, we show how to use the restrictions from the theory to narrow the bounds.Manski Bounds, Consumer Credit, Default