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Field Before After
Trial Title The Co-Holding Puzzle: Why Hold Onto High-Interest Credit When You Have the Savings? A Psychological Account of Co-Holding: Why Some Choose to Simultaneously Borrow and Save
Investigator Jessica Min Rafael Batista
Trial Status on_going completed
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). In this experiment, we tested a low-cost intervention where we provided co-holders with a reminder that they could use their assets to pay off their debt. For some, they were also explicitly shown what this could be costing them. The experiment was conducted in partnership with a large retail bank from 17 February 2020 through 18 March 2020. 125,328 customers were selected to take part in this experiment based on a set of pre-specified criteria. In designing the different treatments, we sought to test two hypotheses: Hypothesis 1) Co-holders are unaware that they are co-holding; Hypothesis 2) Co-holders are unaware of the costs of co-holding. To test these hypotheses, we randomized participants into one of three messaging groups. The Control group received no notification about their co-holding behavior. The Notice group received an in-app notification reading: “You usually have at least $500 available to pay your credit card debt. Every $100 you pay off could reduce your interest charges.” The Notice + Cost group received an in-app notification in which the first sentence was identical to the Notice condition and an additional sentence read: “... Every $100 you pay off could reduce your interest charges by about $20 per year. Saving $100 only earns about $1 in interest per year. . . ”. Our primary outcome of interest was the amount customers would pay off their credit card balance. We also specified a series of secondary measures for which we thought we could reasonably detect changes.
Trial End Date January 31, 2021 March 31, 2020
Last Published August 10, 2020 11:17 AM June 30, 2023 03:59 PM
Study Withdrawn No
Intervention Completion Date March 18, 2020
Data Collection Complete Yes
Was attrition correlated with treatment status? No
Final Sample Size: Total Number of Observations 124,251
Final Sample Size (or Number of Clusters) by Treatment Arms 41424 Control, 41401 Treatment 1, 41426 Treatment 2
Is there a restricted access data set available on request? No
Is data available for public use? No
Additional Keyword(s) behavioral, consumer finance behavioral, consumer finance, co-holding, mental accounting, debt puzzle
Keyword(s) Finance Behavior, Finance
Public analysis plan No Yes
Pi as first author No Yes
Public locations No Yes
Building on Existing Work No
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Other Primary Investigators

Field Before After
Affiliation Stanford University
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Field Before After
Affiliation University of Chicago Stanford University
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Field Before After
Affiliation University of Chicago University of Chicago Booth School of Business
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Other Primary Investigators

Field Value
Affiliation University of Chicago
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