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Field
Trial Title
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Before
The Co-Holding Puzzle: Why Hold Onto High-Interest Credit When You Have the Savings?
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After
A Psychological Account of Co-Holding: Why Some Choose to Simultaneously Borrow and Save
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Field
Investigator
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Before
Jessica Min
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After
Rafael Batista
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Field
Trial Status
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Before
on_going
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After
completed
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Field
Abstract
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Before
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).
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After
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.
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Field
Trial End Date
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Before
January 31, 2021
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After
March 31, 2020
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Field
Last Published
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Before
August 10, 2020 11:17 AM
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After
June 30, 2023 03:59 PM
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Field
Study Withdrawn
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Before
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After
No
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Field
Intervention Completion Date
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Before
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After
March 18, 2020
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Field
Data Collection Complete
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Before
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After
Yes
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Field
Was attrition correlated with treatment status?
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Before
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After
No
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Field
Final Sample Size: Total Number of Observations
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Before
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After
124,251
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Field
Final Sample Size (or Number of Clusters) by Treatment Arms
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Before
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After
41424 Control, 41401 Treatment 1, 41426 Treatment 2
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Field
Is there a restricted access data set available on request?
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Before
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After
No
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Field
Is data available for public use?
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Before
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After
No
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Field
Additional Keyword(s)
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Before
behavioral, consumer finance
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After
behavioral, consumer finance, co-holding, mental accounting, debt puzzle
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Field
Keyword(s)
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Before
Finance
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After
Behavior, Finance
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Field
Public analysis plan
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Before
No
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After
Yes
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Field
Pi as first author
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Before
No
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After
Yes
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Field
Public locations
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Before
No
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After
Yes
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Field
Building on Existing Work
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Before
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After
No
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