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

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 email, online banner, and physical mailer. Using monthly administrative data and pre- and postintervention credit data on almost 14,000 consumers, we find that the “Don’t swipe the small stuff” rule of thumb reduces participants’ targeted credit card balance by an average of 2 percent 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.