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The Co-Holding Puzzle: Why Hold Onto High-Interest Credit When You Have the Savings?
Last registered on August 10, 2020

Pre-Trial

Trial Information
General Information
Title
The Co-Holding Puzzle: Why Hold Onto High-Interest Credit When You Have the Savings?
RCT ID
AEARCTR-0005751
Initial registration date
April 22, 2020
Last updated
August 10, 2020 11:17 AM EDT
Location(s)

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Primary Investigator
Affiliation
Princeton
Other Primary Investigator(s)
PI Affiliation
University of Chicago
PI Affiliation
University of Chicago
PI Affiliation
University of Chicago
Additional Trial Information
Status
On going
Start date
2019-02-01
End date
2021-01-31
Secondary IDs
Abstract
We seek to understand why individuals “co-hold” high levels of high-interest credit card debt and low-yielding liquid savings, by running a randomized controlled trial (RCT).
External Link(s)
Registration Citation
Citation
Batista, Rafael et al. 2020. "The Co-Holding Puzzle: Why Hold Onto High-Interest Credit When You Have the Savings?." AEA RCT Registry. August 10. https://doi.org/10.1257/rct.5751-1.3.
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2020-02-01
Intervention End Date
2020-03-31
Primary Outcomes
Primary Outcomes (end points)
Credit card repayment amount
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
1. Engagement domain:
a. Indicator for saw T1
b. Indicator for interacted with T1
c. Indicator for saw T2
d. Indicator for interacted with T2
2. Credit card repayment domain:
a. Indictor for repaid more than pre-intervention 3-month average
b. Indicator for repaid more than minimum due
c. Indicator for repaid the full amount due
3. Credit card borrowing domain
a. Revolving balance
b. Indicator for balance higher than pre-intervention 3-month average
c. Interest charges
4. Savings domain
a. Savings balance
b. Indicator for balance higher than pre-intervention 3-month average
c. Interest earnings
5. Net financial benefit domain
a. Net interest (savings interest earnings – credit card interest charges)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We run a randomized controlled trial, messaging people who have revolving credit card debt incurring interest and who have savings over a extended time period. We randomize individuals into one control and two treatment groups. The control group receive no messaging. The first treatment group is shown a message to inform them about their available funds. The second treatment group is shown a message with informs them of their available funds, as well as making salient the cost of co-holding.
Experimental Design Details
Not available
Randomization Method
Randomization by app
Randomization Unit
Individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
0
Sample size: planned number of observations
125,328 individuals
Sample size (or number of clusters) by treatment arms
41,776 in control, 41,776 in treatment 1, 41,776 in treatment 2.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
We conducted power analysis to determine minimum detectable effects (MDEs) with α=0.05 and power of 1-β=0.80. We assume the control group sample size is 41,776 and the treatment group is 83,552, pooling together treatment 1 and 2. We run a two-tailed comparison of means, assuming control and treatment groups have the same standard deviations. Based on the analysis, the minimum detectable effect size of credit card repayment amount is $39 on a base of $1,361, or 3% of the mean, and standard deviation of $2,312. Section 4.3 of the pre-analysis plan describes the power analysis in further detail, and table 1 of the pre-analysis plan reports the minimum effect sizes for primary and secondary outcomes. We note when we account for multiple testing, adjusted p-values for a given effect size are roughly twice as large as unadjusted p-values. Any adjustments are made within outcome variable domains (outlined in section 3.3).
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
The University of Chicago Social and Behavioral Sciences Institutional Review Board
IRB Approval Date
2019-08-30
IRB Approval Number
IRB19-1353
Analysis Plan

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