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CFPB Releases Study on Consumer Credit Card Usage

Thu 30 Mar, 2017  /  by McIntyre & Lemon  /   Client Alerts

03/30/17 – The Consumer Financial Protection Bureau (CFPB) has completed a research study testing 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.

The CPFB’s goal for its financial education activities is to help consumers move towards financial well-being. In the CFPB’s definition of financial well-being, consumers have control over day-to-day, month-to-month finances; have the capability to absorb a financial shock; are on track to meet financial goals; and have the financial freedom to make choices that allow one to enjoy life

The study found that exposure to one of the two financial guidelines led to lower credit card balances. The group of participants who received the guideline during a six-month period showed, on average, a lower credit card balance than a similar group who did not receive any guidelines during that time. Further, rates at which consumers in the study opened the email show that consumers are interested in tips and information to help manage their credit cards more effectively.

The results suggest that financial rules-based guidelines hold promise as a simple, cost-effective way to improve certain consumer financial outcomes and that these interventions are well worth further investment and investigation.

CFPB Report.