Occasional Paper No. 45: The semblance of success in nudging consumers 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 44.

Occasional Paper No.45 (PDF)


We study consumer responses to a randomised field experiment on credit card debt repayment. This intervention shrouds the option to automatically pay the contractual minimum at the end of each pay cycle. This increases the salience of the other automatic payment option: cardholders can select a fixed monthly payment, which is typically more than the contractual minimum. The intervention results in a very large increase in the amounts consumers select for automatic payment. However, it has no effect on other, more important outcomes: total debt repayments (including both automatic and non-automatic – ie manual – payments), credit card spending, borrowing costs or debt net of payments. These null effects arise primarily because consumers in the treatment group offset their increased automatic payments by reducing the value of their (infrequent) manual payments. The intervention also causes a modest reduction in consumers selecting any type of automatic payments, which leads to a small increase in arrears.


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.