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Credit card delinquency: How much is the Internet to blame?

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  • Donou-Adonsou, Ficawoyi
  • Basnet, Hem C.

Abstract

This study examines whether Internet access makes households more vulnerable to credit card delinquencies. It is presumed, for a variety of reasons, that online accessibility increases opportunities to spend more. By using the Survey of Consumer Finance and the probit model, this paper shows a positive relationship between Internet access and credit card delinquencies. At the sample mean, the probability of delinquency increases by 0.474 for households with Internet access compared to those with no access. This result is robust to an alternative definition of delinquency. However, the impact is not uniform across different household subgroups, and the results suggest that with Internet access, lower income households, male households, White households, non-senior households, and married households are more likely to become delinquent.

Suggested Citation

  • Donou-Adonsou, Ficawoyi & Basnet, Hem C., 2019. "Credit card delinquency: How much is the Internet to blame?," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 481-497.
    • Handle: RePEc:eee:ecofin:v:48:y:2019:i:c:p:481-497
    DOI: 10.1016/j.najef.2019.03.013
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    More about this item

    Keywords

    Internet; Credit card delinquency; Survey of Consumer Finance; Probit model;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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