Modeling the Credit Card Revolution: The Role of Debt Collection and Informal Bankruptcy

2013 ◽  
Author(s):  
Lukasz A. Drozd ◽  
Ricardo Serrano-Padial
Keyword(s):  
Credit Card ◽  
Debt Collection

scholarly journals Credit card cue effect

2019 ◽  
Vol 38 (2) ◽  
pp. 368-383
Author(s):  
King Yin Wong ◽  
Michael Lynn
Keyword(s):  
Credit Card ◽  
Design Methodology ◽  
Credit Cards ◽  
Well Being ◽  
Financial Security ◽  
Consumer Spending ◽  
Content Type ◽  
Moderation Effect ◽  
Show Evidence

Purpose The extant literature has mixed results regarding the credit card cue effect. Some showed that credit card cues stimulate spending, whereas others were unable to replicate the findings or found that cues discourage consumer spending. The purpose of this paper is to investigate how consumers’ sensitivity to the pain of payment affects their mental associations about credit cards and how the differences in credit card associations moderate the credit card cue effect on spending, providing a possible explanation for the mixed results in the literature. Furthermore, this paper examines the role of consumers’ perceived financial well-being, measured by their perceptions of current and future wealth and their sense of financial security, in mediating this moderation effect. Design/methodology/approach An experimental study was conducted with a sample of 337 participants to test the hypothesized model. Findings After being shown credit card cues, spendthrift participants had more spending-related thoughts and less debt-related thoughts, perceived themselves as having better financial well-being and consequently spent more than tightwad participants. Originality/value To the authors’ knowledge, this is the first study to investigate the direct link between an exposure to credit card cues and perceived financial well-being, and one of the few to show evidence of the moderating effect of consumers’ sensitivity to the pain of payment on spending when credit card cues are present. This study suggests that marketers may use credit card cues to promote consumer spending, whereas consumers, especially spendthrifts, should be aware of how credit card cues may inflate their perceived financial well-being and stimulate them to spend more.

Electronic Publishing: The Role of Carrier and Publisher

1986 ◽  
Vol 21 (1) ◽  
pp. 40-47
Author(s):  
Richard M. Neustadt
Keyword(s):  
Los Angeles ◽  
Credit Card ◽  
Electronic Publishing ◽  
Bulletin Board ◽  
Credit Card Number ◽  
Electronic Bulletin Board ◽  
Phone Calls ◽  
Card Number ◽  
Criminal Charge

Since this is a legal seminar, I thought it would be appropriate to begin with a case. There is a person in Los Angeles who has been operating an electronic bulletin board on his personal computer. What that means is that he has memory attached to his computer, and it is possible for anyone else in the country with a computer to dial into that bulletin board and leave a message automatically in the memory. That message can then be accessed by anyone else who dials in.This person does not exercise any control over the messages that are put in. It is open to anyone who wants to put a message in there. Somebody put into that bulletin board the telephone credit card number of a rich person. Subsequently, many other people dialed into the bulletin board, got the telephone credit card number and charged phone calls to that person. No one knows where the number came from. The board operator was prosecuted under a criminal charge. The question is, is he liable?

Kueski: Revolutionizing Consumer Credit in Mexico

2017 ◽  
pp. 1-10
Author(s):  
Sarit Markovich ◽  
Nilima Achwal
Keyword(s):  
Financial Market ◽  
Financial Services ◽  
Scoring System ◽  
Credit Card ◽  
Consumer Credit ◽  
Credit Scoring ◽  
Loan Approval

This case asks students to step into the role of Adalberto Flores, co-founder and CEO of Kueski, one of the first companies to develop a proprietary algorithm for online loan approval in Mexico. Mexico lacks a standardized credit scoring system, making it difficult for many Mexicans to get approved for a loan or credit card. This, together with the fact that Mexicans generally do not trust traditional banks, makes Mexico an attractive opportunity for fintech companies. Growth, however, could require fintech companies to partner with traditional banks. Students assume the role of Flores to think about the benefits and risks associated with a partnership between Kueski and traditional banks. Students are also challenged to compare the structure of U.S. financial services markets with the Mexican structure and consider the implications on the sustainability of fintech companies in the two markets. The teaching note analyzes the Mexican financial market and the benefits and threats it holds for fintech companies, and outlines a framework for evaluating the risk associated with partnerships.

The Hidden Role of Contract Terms: The Case of Credit Card Minimum Payments in Mexico

2021 ◽  
Author(s):  
Paolina C. Medina ◽  
Jose L. Negrin
Keyword(s):  
Credit Card ◽  
Total Effect ◽  
Regulatory Change ◽  
Financial Contracts ◽  
Point Change ◽  
Whole Number

This paper argues that thresholds in financial contracts act as implicit nudges in consumers’ decisions. Exploiting a regulatory change to credit card minimum payments in Mexico, we find that a 1-percentage point change in minimum payments leads to a 0.87-percentage point change in actual payments, both expressed as a percentage of total balances. We decompose the effect of minimum payments into a constraining effect and a reference effect. The former captures the effect of minimum payments as a binding constraint and accounts for 59% of its total effect. The latter captures any remaining impact of changes in minimum payments beyond their constraining effect and represents 41% of the total. In turn, 67% of the reference effect is explained by the multiple heuristic: the tendency of consumers to pay whole-number multiples of the minimum payment. This paper was accepted by Kay Giesecke, finance.

The moderating role of perceived social risk in bank credit card referral programs

2020 ◽  
Vol 38 (7) ◽  
pp. 1601-1616
Author(s):  
Chanho Song ◽  
Tuo Wang ◽  
Hyunjung Lee ◽  
Michael Y. Hu
Keyword(s):  
Credit Card ◽  
Social Risk ◽  
Content Type ◽  
Referral Decisions ◽  
Social Risks ◽  
Risk Balance ◽  
Referral Decision ◽  
Amazon's Mechanical Turk ◽  
Moderating Role

PurposeThe purpose of this paper is to investigate how the effects of referral rewards in referral reward programs (RRPs) are moderated through perceived social risk of a recommender.Design/methodology/approachA total of 717 consumers are accessed through Amazon's Mechanical Turk worker panel. The authors use t-test and analysis of variance to test the proposed hypotheses.FindingsThe findings show that consumers with high perceived social risk balance financial rewards with social risks, while low social risk consumers largely ignore these social risk elements surrounding a referral decision.Originality/valueThe inclusion of perceived social risk provides the opportunity to fully understand how a consumer goes about balancing social risk and referral rewards in making referral decisions. The concept of social risk has not been previously applied to this context.

Surveying Mobile Commerce Environments

2005 ◽  
pp. 2702-2711
Author(s):  
Jari Veijalainen ◽  
Mathias Weske
Keyword(s):  
User Interface ◽  
Credit Card ◽  
Mobile Terminal ◽  
Mobile Commerce ◽  
Public Key ◽  
Mobile Terminals ◽  
The Public ◽  
Authentication And Authorization ◽  
New Phase

During the last five years, the term mobile commerce (m-commerce) has appeared in the vocabulary of business people and researchers. Historically and conceptually, m-commerce can be regarded a new phase in electronic commerce (e-commerce). Although the term was introduced without a clear meaning and it is still lacking a single widely accepted definition, most people would say that the term m-commerce refers to e-commerce activities performed by people while on the move. Thus, m-commerce involves e-commerce transactions where a mobile terminal and a wireless network are used to conduct them. Therefore, m-commerce takes advantage of the e-commerce infrastructure developed for Internet e-commerce. Although in some cases an m-commerce transaction might be an alternative to a regular e-commerce transaction (such as buying a book) performed using a workstation and wired network, in many cases this is not the situation. The limitations of the mobile device - for instance, user interface limitations - are such that it is not attractive to perform typical Internet e-commerce transactions on them. Wireless technologies, combined with so-called ‘Internet-enabled’ terminals, constitute an ideal platform to realize new types of e-commerce transactions that are not possible or reasonable for wired terminals. The small and light, yet powerful, mobile terminals are almost always carried by their owners, just like wallets or watches. They can indeed also store electronic cash, credit card information, tickets, certificates of the Public Key Infrastructure (PKI), and so forth. Thus, they can assume the role of an e-wallet, as well as function as authentication and authorization devices in various contexts.

scholarly journals Modeling the Revolving Revolution: The Debt Collection Channel

2017 ◽  
Vol 107 (3) ◽  
pp. 897-930 ◽  
Author(s):  
Lukasz A. Drozd ◽  
Ricardo Serrano-Padial
Keyword(s):  
Information Technology ◽  
Private Information ◽  
Credit Cards ◽  
Consumer Debt ◽  
Widespread Adoption ◽  
Debt Collection ◽  
Role Of Information

We investigate the role of information technology (IT) in the collection of delinquent consumer debt. We argue that the widespread adoption of IT by the debt collection industry in the 1990s contributed to the observed expansion of unsecured risky lending such as credit cards. Our model stresses the importance of delinquency and private information about borrower solvency. The prevalence of delinquency implies that the costs of debt collection must be borne by lenders to sustain incentives to repay debt. IT mitigates informational asymmetries, allowing lenders to concentrate collection efforts on delinquent borrowers who are more likely to repay. (JEL D14, D82, G21, L84, M15, O33)

scholarly journals CAPITALISM, CONSUMERISM AND POPULAR CULTURE

2018 ◽  
Vol 6 (4) ◽  
pp. 205-210
Author(s):  
Ankita Singh
Keyword(s):  
Credit Card ◽  
Modern Society ◽  
Negative Influence ◽  
Modern World ◽  
Main Theme ◽  
Soap Industry ◽  
Fight Club ◽  
The Difference ◽  
Compulsive Buying Disorder

A product’s utility has evolved over time. In today’s world, the commodities possess the power to define us. Every product that we own today, through its branding, reflects our social status, values and vice versa. It is difficult to refute the negative influence of capitalism that we witness in form of obsession with possession. The aim of the paper is to study the extent to which the products of the modern society like the protagonists in the following two movies suffer; whether it is possible to imagine an end of consumerism and not the world or has it become an inherent part of the late capitalist world in which there is no completeness but the perennial emergence of substitutes (objects). This paper studies the aforementioned issues through the movies “Fight Club” and “Confessions of a Shopaholic”. The first section of the paper uses the case of soap industry as the foundation and analyses “Fight Club”. The second section examines the role of credit card companies in compulsive buying disorder through “Confessions of a Shopaholic”. Despite the similarity between the two movies on the grounds of the modern world “suffering”, the paper highlights the difference in their treatment of the main theme of consumerism and links it to the gender politics. The final section draws a comparison between the endings of the two movies and investigates the premise of disorder in “Fight Club” and its existential threat to capitalism.

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