2016年-FCA英国金融行为监管局_ms14_6_3_credit_card_market_study_final_findings_report_annex_4_8页_530kb

Credit Card Market Study: Annex 4 - Behavioural Trials Summary

Core Content

This annex outlines the design and objectives of behavioural trials aimed at influencing consumer credit card repayment choices. The trials are informed by behavioural economics and psychology, seeking to understand how presentation of repayment options and consumer awareness of the benefits of quicker repayment can affect repayment behaviour. The goal is to encourage more active repayment decisions that lead to higher and more sustainable credit card repayments.

Trial Aims

The trial seeks to achieve the following outcomes:

• Reduce the proportion of repayments at the contractual minimum significantly and sustainably.
• Increase the nominal value of credit card repayments across users (excluding transactors and those in persistent arrears).

If successful, the trial will be evaluated against broader consumer outcomes, including:

• Lower interest charges
• Faster debt repayment
• Improved creditworthiness
• Reduced likelihood of default

Data Analysis of Credit Card Repayments

The FCA's analysis of 2014 data shows the following distribution of credit card repayments relative to the contractual minimum:

• 28% made full repayments (bar labelled 'full' in Figure 1)
• 25% made repayments at the contractual minimum (bar labelled '0')
• 15% did not meet the contractual minimum (bar labelled 'arrears')
• 32% paid above the contractual minimum but less than the full balance

The study also highlights that direct debit is a growing repayment channel, with 42% of credit cards using it by January 2015, and 31% using direct debits set to the contractual minimum. There are significant variations in the adoption of direct debit among lenders, with some using mobile apps more extensively than others.

Behavioural Economics & Psychology of Repayment Decisions

The FCA is leveraging insights from behavioural biases to design interventions that could positively impact repayment decisions. Key concepts include:

Anchoring

• Consumers are influenced by the minimum repayment amount, which acts as an anchor and leads to lower repayment choices.
• Even with additional disclosures, the presence of the minimum repayment option significantly reduces repayment amounts.
• Research shows that the lower the minimum repayment, the lower the actual repayment.

Present-Biased Consumers

• Consumers often prioritize immediate gratification over long-term financial benefits, leading to time-inconsistent decision-making.
• This bias is supported by studies from Laibson (1997), Heidhues & Koszegi (2010), Shui & Ausubel (2005), and DellaVigna & Malmendier (2004).
• The FCA is considering ways to nudge consumers toward more rational, long-term repayment decisions.

Inertia and Limited Attention

• Consumers may suffer from inertia, meaning they are unlikely to change their repayment habits unless prompted.
• Limited attention can result in consumers not fully processing repayment information, especially when using direct debit.
• This can lead to high borrowing costs and slow debt paydown.

Key Findings from Which? Research

• A survey of 2,218 adults in Great Britain found that most credit card users do not understand the cost implications of minimum repayments.
• When informed that a £500 balance would take over 12 years to clear with minimum payments, 73% of minimum payers said this was longer than expected.
• 48% of minimum repayers believed that the minimum repayment level is recommended by their provider, and 50% thought most people repay the minimum.

Capital One Trials

Capital One conducted randomized controlled trials (RCTs) to encourage higher repayments:

• A treatment sent to consumers who had paid the minimum or close to it for at least 5 of the last 6 months included a message encouraging them to increase their repayment amount.
• This treatment resulted in 12% of consumers switching to a higher direct debit.
• These consumers increased their average payments by 73%.
• The trial highlighted that presenting repayment options in a more prominent way can lead to more substantial repayment increases.

Conclusion

The trials aim to shift consumer behaviour by addressing anchoring, present bias, and inertia. By altering how repayment options are presented and increasing consumer awareness of the benefits of higher repayments, the FCA hopes to achieve sustainable improvements in credit card repayment behaviour, ultimately leading to lower interest costs and better financial outcomes for consumers.