Consumer Credit: Changing Patterns in Supply and Demand Variables, and Their Implications

Abstract

Retail outlets and finance companies were the first businesses to offer consumer installment credit, and for many years they enjoyed a virtual monopoly in that area. This situation has changed. There has been a gradual but continual decrease in their percentage of market share, and a corresponding increase in that held by commercial banks and credit unions. This study seeks to explain this change in market share, to measure the effects of selected supply and demand variables which may have contributed to it, and to assess the potential ramifications for the above lenders and the borrowing public at large.

Differences in Utilisation Behaviour Among Types of Credit Cards

“…Economic research has focused almost exclusively on the macro-economic issues of credit cards such as the role of credit cards in influencing the demand for money in the aggregate sense [Batra, 1975;Dauten, Apilado, and Warner, 1973;Hosek and Zahn, 1974;Marcus, 1960;and White, 19761. At the micro-level, previous economic research has followed two main courses. First, the micro-economic aspects of credit card markets have been sparingly analysed.…”