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Do not swipe the small stuff: A randomized evaluation of rules of thumb‐based financial education

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  • Brett Theodos
  • Christina Plerhoples Stacy
  • Devlin Hanson
  • Julian Jamison
  • Rebecca Daniels

Abstract

We perform the first rigorous test of a rules of thumb‐based approach to financial education on consumer behavior and outcomes. We test two rules of thumb that are targeted at reducing credit card revolving and deliver them in a randomized fashion via e‐mail, online banner, and physical mailer. Using monthly administrative data and pre and postintervention credit data on almost 14,000 consumers, we find that the “Do not swipe the small stuff” rule of thumb reduces participants' targeted credit card balance by an average of 2% at a cost of around $0.50 per person. The “Credit keeps charging” rule shows a decline as well but the impact is not significant.

Suggested Citation

  • Brett Theodos & Christina Plerhoples Stacy & Devlin Hanson & Julian Jamison & Rebecca Daniels, 2020. "Do not swipe the small stuff: A randomized evaluation of rules of thumb‐based financial education," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(2), pages 701-722, June.
    • Handle: RePEc:bla:jconsa:v:54:y:2020:i:2:p:701-722
    DOI: 10.1111/joca.12298
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    References listed on IDEAS

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