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RBA Glossary definition for charge card
charge card – A charge card is a card whose holder has been granted a non-revolving credit line enabling the holder to make purchases and possibly make cash advances. A charge card does not offer extended credit; the full amount of any debt incurred must be settled at the end of a specified period.
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Appendix B: Estimation and Sensitivity Testing of Net Monetary Benefit
8 Oct 2018
RDP
2018-11
According to the survey, gift cards are the most common way that consumers redeem their points, used by just over one-third of rewards card holders (Figure B1). ... Respondents were asked ‘How much were you charged in credit card interest in your most
https://www.rba.gov.au/publications/rdp/2018/2018-11/appendix-b.html
Consumer Credit Card Choice: Costs, Benefits and Behavioural Biases
1 Oct 2018
RDP
2018-11
But some consumers also incur high net costs from their credit card, in both interest charges and fees. ... If, at the time of choosing their card, cardholders do not expect to incur interest charges (e.g.
https://www.rba.gov.au/publications/rdp/2018/2018-11/full.html
Literature
8 Oct 2018
RDP
2018-11
Some evidence suggests that consumers possess an ‘optimism bias’, systematically underestimating their likely card expenditure and their probability of incurring interest charges. ... If, at the time of choosing their card, cardholders do not expect
https://www.rba.gov.au/publications/rdp/2018/2018-11/literature.html
Barriers to Switching
8 Oct 2018
RDP
2018-11
they held a different credit card, only a relatively small number of cardholders switch cards. ... These barriers might be less binding for those who break even or receive a net monetary benefit from their card; they may feel no impetus to switch cards,
https://www.rba.gov.au/publications/rdp/2018/2018-11/barriers-to-switching.html
Data
8 Oct 2018
RDP
2018-11
As part of the Consumer Payments Survey, each respondent identified their main credit card (if they held multiple cards, this was the one they used most often). ... The detailed features of these cards, including fees, interest rates and rewards programs
https://www.rba.gov.au/publications/rdp/2018/2018-11/data.html
Evidence of Behavioural Biases?
8 Oct 2018
RDP
2018-11
behaviour. The interest rate that a credit card carries is not relevant to cardholders unless they incur interest charges. ... a) Respondents were asked ‘Thinking about when you first opened your main credit card account, what factors influenced your
https://www.rba.gov.au/publications/rdp/2018/2018-11/evidence-of-behavioural-biases.html
Conclusion
8 Oct 2018
RDP
2018-11
In particular, I find suggestive evidence of optimism bias; that cardholders systematically underestimate their probability of incurring credit card interest charges. ... While I estimate that the vast majority of cardholders would be better off if they
https://www.rba.gov.au/publications/rdp/2018/2018-11/conclusion.html
Appendix F: End of Survey Questionnaire
8 Oct 2018
RDP
2018-11
Yes, I closed my main credit card and now I usually use one of my other credit cards. ... Other, please specify ______________. Q8.3.2. Thinking about credit cards in general, what is the most important feature that made you decide to have a credit card
https://www.rba.gov.au/publications/rdp/2018/2018-11/appendix-f.html
Introduction
8 Oct 2018
RDP
2018-11
RDP 2018-11: Consumer Credit Card Choice: Costs, Benefits and Behavioural Biases 1. ... But some consumers also incur high net costs from their credit card, in both interest charges and fees.
https://www.rba.gov.au/publications/rdp/2018/2018-11/introduction.html
Appendix C: Regression Analysis of Overall Distribution of Net Benefit
8 Oct 2018
RDP
2018-11
564.21. 567.22. 503.14. (178.91). (182.00). (168.29). Number of credit cards (omitted category = 1 card). ... 291.00. 378.96. (60.73). (13.55). (65.79). (24.67). (119.66). (143.47). Number of credit cards (omitted category = 1 card).
https://www.rba.gov.au/publications/rdp/2018/2018-11/appendix-c.html