Credit Card Market Overview
Industry Trends and Pricing Issues
Financial innovations have increased credit availability for U.S. households over the last two decades. For households with collateral assets, financial innovations, specifically those in the mortgage market, have allowed households to leverage their balance sheets and finance large expenditures they might otherwise have had to forgo. Such developments can be advantageous because they make some households less sensitive to temporary disruptions in income or cash flow. Financial innovations, however, also make consumers more vulnerable to unexpected changes in asset prices. A sudden increase in the value of underlying collateral assets used to secure consumer borrowing, such as house prices, may…
