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Credit Card Purchasing and Static Consumer Behavior Theory

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  • Thomas L. Sporleder
  • Robert R. Wilson

Abstract

This article treats the theoretical consequences of consumer credit card use. A delayed repayment model provides consumer optimization and indifference conditions between cash and credit card transactions. Under realistic interest and opportunity cost rates, consumers can rationally let a balance revolve about 39 percent of the time and maintain indifference over time.

Suggested Citation

  • Thomas L. Sporleder & Robert R. Wilson, 1974. "Credit Card Purchasing and Static Consumer Behavior Theory," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(1), pages 129-134.
    • Handle: RePEc:oup:ajagec:v:56:y:1974:i:1:p:129-134.
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    File URL: http://hdl.handle.net/10.2307/1239354
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    Cited by:

    1. Hasan, Syed Akif & Subhani, Muhammad Imtiaz & Osman, Ms. Amber, 2011. "Plastic Money/Credit Cards Charisma for Now and Then (A Thin Line between Easy Money and Risky Money)," MPRA Paper 34739, University Library of Munich, Germany, revised 2011.
    2. Jane Brown & Anders Wäppling & Helen Woodruffe-Burton & Kate Black, 2017. "The orbit of consumer credit choices," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 22(2), pages 85-96, June.

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