Do Nudges Reduce Borrowing and Consumer Confusion in the Credit Card Market?

C-Tier
Journal: Economica
Year: 2022
Volume: 89
Issue: S1
Pages: S178-S199

Authors (6)

Paul Adams (not in RePEc) Benedict Guttman‐Kenney (not in RePEc) Lucy Hayes (not in RePEc) Stefan Hunt (not in RePEc) David Laibson (Harvard University) Neil Stewart (not in RePEc)

Score contribution per author:

0.168 = (α=2.01 / 6 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study nudges that turn out to have precise null effects in reducing long‐run credit card debt. We test nudges across two field experiments covering 183,441 UK cardholders. Our first experiment studies nudges added to monthly credit card statements. Our second experiment studies letters and email nudges (separate from monthly statements) sent to cardholders who signed up to automatically pay the minimum required payment. In a follow‐up survey to our second experiment, we find that 96% of respondents underestimate the time it would take to fully repay a debt if the cardholder made only the minimum required payment. The nudges reduce this confusion, but underestimation remains overwhelmingly common.

Technical Details

RePEc Handle
repec:bla:econom:v:89:y:2022:i:s1:p:s178-s199
Journal Field
General
Author Count
6
Added to Database
2026-01-25