Choosing a mortgage is one of the most important financial decisions made by a household. Financial innovation has given rise to more complex mortgage products with back-loaded payments, known as ‘Alternative Mortgage Products' (AMPs), or ‘Interest-Only Mortgages'. Using a specially designed...

Many studies have estimated the relationship between income and well-being. However, economic theory predicts that well-being derives from consumption, not income. Using newly available US micro-level panel data, we show that consumption has much larger effects on life satisfaction than does...

Automatic payments are increasingly common. The psychologies of the prominent of number, defaults and inattention combine to create an unexpected side effect of automatic payments. We see that credit card holders set a default automatic payment to match their modal repayment behavior. For those...

This paper examines the relationship between self-control, financial literacy and over-indebtedness on consumer credit debt among a sample of U.K. consumers using data from a household survey. Both lack of self-control and financial illiteracy are positively associated with non-payment of...

We utilise questions concerning individual ‘debt literacy' incorporated into market research data on households' unsecured debt positions to examine the association between consumer credit and individual financial literacy. We examine the relationship between individual responses to debt...

Is financial literacy a substitute or complement for financial advice? In this paper we analyze the decision by consumers to seek financial advice in the form of credit counseling concerning their credit and debt. Credit counseling is an important component of the consumer credit sector for...

Policymakers have expressed concern that some mortgage holders do not understand or correctly choose their mortgage products, especially alternative mortgage products (AMPs) with back-loaded payments. Using a specially design question module in a UK survey, we investigate the impact of consumer...