The CARD Act and Young Borrowers: The Effects and the Affected. Issue 7 (15th September 2016)

• Record Type: Journal Article
• Authors: DEBBAUT, PETER; GHENT, ANDRA; KUDLYAK, MARIANNA
• Is Part Of: Journal of money, credit, and banking. Volume 48:Issue 7(2016)
• Page Start: 1495
• Page End: 1513
• Publication Date: 2016-09-15
• Subjects: D14 -- D18 -- G21 -- G28 -- young borrowers -- life cycle borrowing -- consumer protection; Banks and banking -- Periodicals; Credit -- Periodicals; Money -- Periodicals; 332
• DOI: 10.1111/jmcb.12340
• Languages: English
• ISSNs: 0022-2879

Abstract

Abstract : We study a new law that restricts credit to individuals under age 21. We first use a difference‐in‐difference approach to estimate the effect of the law on credit card availability. Following the passage of the law, individuals under age 21 are 8 percentage points (15%) less likely to have a credit card, have fewer cards, and, conditional on having a card at all, are 35% more likely to have a cosigned card. We then use data from before the passage of the law to identify the characteristics of those individuals most likely to be affected by the Act.