Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303174 
Year of Publication: 
2024
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2024-26
Publisher: 
Bank of Canada, Ottawa
Abstract: 
We study a government policy that restricts repayment choices with the aim of reducing credit card debt. The policy requires the minimum payment on credit card balances in Quebec to be at least 2% of the statement balance for cards opened before August 2019 and at least 5% for cards opened after August 2019. The rest of Canada is unaffected. We estimate this policy's effects by applying a difference-in-differences methodology to comprehensive, Canadian consumer credit-reporting data. The policy causes a persistent increase in minimum payments. The policy has trade-offs: reducing revolving debt comes at a cost of reducing credit access, and potentially increasing delinquency.
Subjects: 
Credit and credit aggregates
Financial system regulation and policies
JEL: 
D18
E21
G28
G51
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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