The power of light-touch financial education: A demonstration with credit card revolvers
Can simple guidelines, or rules to live by, help consumers reduce their credit card debt? Can they be useful as a financial education tool? The Consumer Financial Protection Bureau (CFPB) commissioned a research study to test two specially developed guidelines reminding consumers to be cognizant of credit card usage. The guidelines were tested in a randomized controlled trial with a large group of consumers who carry a credit card balance month to month. The study found that exposure to one of the two financial guidelines (“Don’t swipe the small stuff”) led to lower credit card balances. Findings suggest that rules-based messages hold promise as a low-cost, scalable method of financial education.