Zywicki: Consumer Credit A Boon to American Families

In a contribution to the Washington PostProfessor Todd J. Zywicki and Thomas A. Durkin explain why consumer credit is beneficial for American families and the economy. The piece is adapted from Zywicki’s recent book Consumer Credit and the American Economy, co-authored with Durkin, Gregory Elliehausen, and Michael E. Staten.


The growth of general acceptance credit cards (such as Visa, MasterCard and American Express) has enabled consumers to separate the credit transaction from the goods, promoting competition and consumer choice on both fronts. Credit cards have also relieved retailers of the cost and risk of running in-house credit operations and have thereby enabled start-up businesses (including online stores such as to compete with big department and specialty stores.

What about payday lending and similar high-cost products? Academic studies show that those who use payday lending do so because they don’t have credit cards (or are maxed out), and it can be less expensive than available alternatives, such as bank overdraft protection, pawnshops, bounced checks and late bill payments. Eliminating access to preferred products doesn’t eliminate the need for credit.

Credit is a powerful tool for American families, Washington Post, April 17, 2015. By Todd Zywicki & Thomas A. Durkin.

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