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What is the size of credit card debt in Brazil? Reporting Thresholds, Interest Rates and Income Distribution

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  • Bertran, Maria Paula
  • Echeverry, David

Abstract

Before its severe recession in 2014, Brazil saw a large expansion in household borrowing. We document that the magnitude of credit card debt has been shrouded by reporting thresholds and other methodological choices in bank reporting to credit registry data. This has given room to erroneous perceptions concerning the success of recent public policies aimed at reducing consumer credit risk. Using survey data from 18,000 households we show that credit card debt is widespread, expensive and prone to falling in arrears. This qualifies the role of government-induced credit supply to emphasize the channel of interest rates.

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  • Bertran, Maria Paula & Echeverry, David, 2021. "What is the size of credit card debt in Brazil? Reporting Thresholds, Interest Rates and Income Distribution," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    • Handle: RePEc:eee:beexfi:v:30:y:2021:i:c:s2214635021000046
    DOI: 10.1016/j.jbef.2021.100460
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