Effectiveness of online early intervention financial education programs for credit-card holders

As part of The Saint Paul Foundation?s Credit Card Project, three credit card issuers conducted randomized tests of whether offering online credit card education to credit cardholders is effective in changing behavior. The targeted populations were either new cardholders or cardholders reaching the point of first delinquency, and two of the tests involved college students. Completion of online credit education correlates with more responsible credit card usage, but the experiments don?t prove that the education causes this behavior. Experiments with college student cardholders by Wells Fargo find much more responsible behavior by those who choose to complete the online education. However, both Wells Fargo and U.S. Bank find smaller overall differences between the control and experimental groups. ; Tests for a statistically significant effect on the full experimental group are negative. If the behavioral differences are taken as given, impacts on issuer profitability are mixed. Because group means imply the experimental group is more likely to pay on time and have lower revolving balances, the issuers lose interest and late and overlimit fee income. This is not offset by lower charge-off losses for U.S. Bank and may or may not be for Wells Fargo. Target Financial Services? and U.S. Bank?s tests offering online education to cardholders at about the time of their first delinquency do not achieve high rates of participation in the online education, despite some other positive results.