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Do not swipe the small stuff: A randomized evaluation of rules of thumb‐based financial education
Author(s) -
Theodos Brett,
Stacy Christina Plerhoples,
Hanson Devlin,
Jamison Julian,
Daniels Rebecca
Publication year - 2020
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/joca.12298
Subject(s) - rule of thumb , credit card , banner , swipe , thumb , test (biology) , finance , business , computer science , economics , marketing , actuarial science , computer security , medicine , paleontology , archaeology , algorithm , anatomy , biology , payment , history
We perform the first rigorous test of a rules of thumb‐based approach to financial education on consumer behavior and outcomes. We test two rules of thumb that are targeted at reducing credit card revolving and deliver them in a randomized fashion via e‐mail, online banner, and physical mailer. Using monthly administrative data and pre and postintervention credit data on almost 14,000 consumers, we find that the “Do not swipe the small stuff” rule of thumb reduces participants' targeted credit card balance by an average of 2% at a cost of around $0.50 per person. The “Credit keeps charging” rule shows a decline as well but the impact is not significant.