Occasional Paper No. 44: The conflict between consumer intentions, beliefs and actions to pay down credit card debt

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. 42, 43 and 45.

Occasional Paper No.44 (PDF)


​​​​​​We attempt to increase credit card payments through behaviourally-informed disclosures tested in experiments across 3 UK lenders. The first experiment finds no effect of adding disclosures to credit card statements. The second experiment targets credit card users paying their bills via automatic minimum payments. This group commonly and repeatedly only make minimum payments. Few consumers respond to the intervention. The treatment causes an average reduction in consumers paying only the minimum and a reduction in credit card debt that is not sustained. Adding cost information to the disclosures does not significantly change responses, however, adding a reminder does increase response rates. Effects are primarily driven by the subgroup of consumers with 0% balance transfer debts, with no effects for other consumers. The continuing patterns of repeated minimum payments among consumers with automatic minimum payments do not appear to be explained by liquidity constraints. They are also inconsistent with the majority of stated preferences showing intentions for debt reduction. An explanation appears to be that consumers have mistaken beliefs. They under-estimate how long debt will take to amortise whilst only making minimum payments and avoid information telling them otherwise.


Paul Adams, Benedict Guttman-Kenney, Lucy Hayes, Stefan Hunt, David Laibson 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.