Several researchers (Ausubel, 1991; Cargill & Wendell,
1996; Chang & Hanna, 1992) have argued that borrowers
do not search for low credit card interest rates. Some of
these non-shoppers are convenience users. For them,
interest rates are irrelevant because they pay the balance
in full each month. Others perceive a low expected value
of savings. However, recent data show that between
1992 and 1995 a higher proportion of consumers
revolved balances, and the average value of those
balances has increased (Chimerine, 1997; Kennickell,
Starr-McCluer & Sundén, 1997). If credit cards are used
as a financing mechanism instead of a medium of
convenience, the interest rate should be an important
determinant of consumers’ choice of which credit card to
hold