Adams, P., Guttman-Kenney, B., Hayes, L., Hunt, S., Laibson, D., & Stewart, N. (2018). The semblance of success in nudging consumers to pay down credit card debt. Financial Conduct Authority Occasional Papers in Financial Regulation, 45.

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.