Survey_ALS_2007

Abstract

We use a unique, proprietary dataset from a large financial institution that issues credit cards nationally. The dataset contains a representative sample of about 75 thousand credit card accounts open as of June 2000, followed monthly for 24 months. The bulk of the data consists of the main billing information listed on each account's monthly statement, including total monthly payments, spending, balances, and debt, as well as the credit limit. Note that credit cards can be used for both transactions and borrowing purposes. “Debt” includes only interestincurring balances that are rolled over, whereas “balances” also includes transactions balances that are paid off. The dataset also contains some credit bureau data about the other credit cards held byeach account-holder, in particular the number of other cards and their combined balances. (The credit bureaus do not separately record credit card debt, spending, or payments, they record only balances.) The credit card issuer obtained this data from the credit bureaus quarterly. Finally, there is some limited demographic data, i.e., the age and marital status of the account-holders. (Account-holders are assumed to be married if there is a spouse also listed on the account.) An important advantage of the underlying data source is that it also included a variable indicating the penultimate digit of the account-holders’ social security numbers. This variable was used to identify the time of rebate receipt. This dataset has a number of additional advantages. Relative to traditional household datasets like the SCF, the sample is large with little measurement error. Also, because each account is observed over many months, it is possible to study high-frequency dynamics. On the other hand, using credit card data does entail a number of limitations. The main unit of analysis is a credit card account, not an individual (who can hold multiple accounts). We partially circumvent this limitation by using the available data about the account-holders from the credit bureaus. Also, we do not observe household assets or total spending.