The experiment will test if using credit card statements with simplified language and design helps individuals make better financial decisions. The idea is that information conveyed by credit card statements tends to be presented in a technical and confusing way, which limits individuals understanding. Therefore, by simplifying the statements, one expects people understand better the use and risk of utilizing this particular financial product.
To assess this hypothesis individuals will be randomly allocated to a control group or one of two treatment groups. The control group will be shown a statement that is similar to those currently available for a local credit card. Treatment group 1, will view an improved statement that changes the design and wording of the document trying to convey better financial information related to repayment options, costs and fees of credit cards. Treatment 2 incorporates the changes in the improved statement as T1, but highlights the lowest interest payment options (salience). All statements are based on the same information and the same hypothetical fees and charges.
Aside from the main intervention related to credit card statements, we want to test if anchoring can affect financial decision making when paying financial obligations. For this purpose we will randomly allocate half of the participants of the control and treatment groups to different payment screens. The control group for this intervention will see a blank form when deciding the amount of the payment they are willing to make, and the treated group will see a prefilled payment form that shows the total amount.
This second intervention is focused on anchoring and pre-filled payment screens. The idea is that pre-filling amounts to pay can nudge individuals to paying the statement in a way it reduces fees and interests associated with the use of the financial product.
Given this design, the experiment will consist of one pure treatment group and 5 treatment branches as follows:
Intervention 1 - Different credit card statements:
- Control (T0)
- Improved statement design and clearer language (T1)
- Improved statement T1 with focus on low interests (T2).
Intervention 2 - Prefilled payment form:
- Control: blank form (Pure Control - T0.0), Prefilled form (T0.1)
- T1: blank form (T1.0), Prefilled form (T1.1)
- T2: blank form (T2.0), Prefilled form (T2.1)