Journal of Banking & Finance Vol. 108 2019
Responses to an anticipated increase in cash on hand: Evidence from term loan repayments
open access
Abstract
I use account-level credit card and term loan data to analyze consumers’ responses to anticipated increases in cash on hand following term loan run-offs. Financial constraints are elicited using past credit card payment behavior and can explain the response of credit card but not term loan expenditure: unconstrained consumers are 23% more likely to finance new durable goods with term loans after the run-off. The results provide evidence of consumers engaging in sequential term loan borrowing.
- DOI
- 10.1016/j.jbankfin.2019.105649
- Volume
- 108
- Pages
- 105649
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib