This paper assesses the impact on consumption and debt repayment from a credit card promotional campaign offering cash-back rewards. Using account-level administrative data from a large U.S. financial institution, we employ a generalized difference-in-differences design and find that even with a small 1% cash-back incentive, the rewards program leads to a substantial change in consumer behavior. Cardholders joining the rewards program increase their credit card spending by 32% and their debt by 8%, with such behavior persisting in the long run. Evidence from credit bureau confirms that the higher spending and debt are not driven by cross-card substitution or similar promotions by other card issuers. Different consumer segments respond differentially to the promotional campaign. Consumers with a higher level of liquidity constraints and who are less financially literate demonstrate more pronounced responses.

This paper provides new evidence on the impact of the housing collateral lending channel on entrepreneurial activities by allowing homeowners to access property equity and invest in new businesses. We exploit dual housing property rights forms in China as an instrument, where complete access to collateral values is only legally granted to homeowners with full property rights (FPR), with no access for those without FPR. Using data from a large survey, we find that local house price growth significantly increases the probability of starting a new business for FPR homeowners relative to the control group. The effects are robust when we rely on the exogenous shock induced by the house purchase restriction and primarily driven by homeowners without household debt. Macro analysis supports a positive correlation between the concentration of FPR homeowners and employment and economic growth, where homeowners are better able to obtain external financing via the collateral channel.