Occasional Paper No. 42: Increasing credit card payments using choice architecture: The case of anchors and prompts

The key findings from this research paper on credit cards are summarised in the FCA Research Note Helping credit card users repay their debt: a summary of experimental research designed for a broad readership and also covering companion papers Occasional Papers Nos. 43, 44 and 45.

Occasional Paper No.42 (PDF)


We investigate ways to encourage consumers to repay more of their credit card debt, which would lead to earlier full repayment, lower interest costs and reduced risks to credit scores, which can be affected by carrying long-term debt. Previous academic research has shown that consumers are strongly influenced by the inclusion of the minimum payment amount on their credit card bill, leading some consumers to pay less than they otherwise would. Through an online experiment, we replicate results from previous research, that removing the minimum payment amount from bills causes an upward shift in repayments - away from the minimum and towards the full amount. This lends further support to the theory that the minimum amount acts as an anchor or target value, biasing payments downwards. We also find that including a prompt to pay the balance in full causes a large increase in the probability of paying in full. For those who choose to pay the minimum amount or close to it, prompting them to choose higher payments which would clear the debt in 1, 2 or 3 years results in many choosing to increase their repayment, with none choosing to decrease it. All 3 effects resulted in large changes to the distribution of repayments, with fewer people choosing to pay the minimum, more people choosing to pay the full amount and an increase in average repayments.


Paul Adams, Benedict Guttman-Kenney, Lucy Hayes, Stefan Hunt and Neil Stewart


Occasional Papers contribute to the work of the FCA by providing rigorous research results and stimulating debate. While they may not necessarily represent the position of the FCA, they are one source of evidence that the FCA may use while discharging its functions and to inform its views. The FCA endeavours to ensure that research outputs are correct, through checks including independent referee reports, but the nature of such research and choice of research methods is a matter for the authors using their expert judgement. To the extent that Occasional Papers contain any errors or omissions, they should be attributed to the individual authors, rather than to the FCA.