Sticking to Your Plan: The Role of Present Bias for Credit Card Paydown

Previously circulated as “Sticking to Your Plan: Hyperbolic Discounting and Credit Card Debt Paydown”. Numerous seminar participants at Stanford, UNC Kenan-Flagler, Yale SOM, Notre Dame, Kellogg, Minnesota Carlson, Brown, Olin, MSU, NYU Stern, the Federal Reserve Board, the New York Federal Reserve, the Philadelphia Federal Reserve, the Federal Reserve Bank of Boston, Harvard Business School, LMU Munich, Cornell University, Princeton University, the CFPB, as well as conference participants at the Aspen Conference on Economic Decision Making, the SITE Summer Workshop, the Red Rock Finance Conference, and the Christmas Meeting of the German Economists Abroad provided insightful comments. We thank Liran Einav, Caroline Hoxby and Jonathan Levin for their tremendous advice and guidance. We also benefited from conversations with Sumit Agarwal, Juliane Begenau, Doug Bernheim, Tim Bresnahan, George Bulman, Dominic Coey, Xavier Gabaix, Simon Hilpert, Harrison Hong, Alejandro Molnar, Juliana Salomao, Paulo Somaini, Denis Sosyura, Charles Sprenger, Luke Stein, Johannes Stroebel, and Jeremy Tobacman. We are grateful to the team at ReadyForZero for providing the data and making this research possible, especially to Rod Ebrahimi and Ignacio Thayer. Financial support to Theresa Kuchler from the B.F. Haley and E.S. Shaw Fellowship through SIEPR is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.