 Reducing credit card delinquency using repayment remindersDaniel Campbell, Andrew Grant and Susan Thorp Journal of Banking & Finance, 2022, vol. 142, issue C Abstract: Can digital repayment reminders reduce costly credit card delinquency? This paper analyzes data from a 2016 randomized controlled field trial of a reminder sent to 30-days-overdue credit card debtors via an app or online portal. The reminder significantly raised repayment rates, and amounts repaid, of high credit score delinquent debtors, but did not significantly raise the repayment rate of lower credit score delinquents. The reduction in average delinquency among treated debtors continues for at least 12 months after treatment and substantially reduces provisioning expenses of the credit provider. We find that 2.4 percentage points (CI 1.68–3.12) more treated than untreated debtors (64.3% compared with 61.9%) repay all arrears within the current repayment cycle. For the 84.4% of the sample who we observed logged in and saw the reminder, the effect rises to 2.7 percentage points (CI 1.95–3.50). Keywords: Consumer debt; Randomized controlled trial; Information avoidance; Credit score (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:142:y:2022:i:c:s0378426622001431 DOI: 10.1016/j.jbankfin.2022.106549 Access Statistics for this article Journal of Banking & Finance is currently edited by Ike Mathur More articles in Journal of Banking & Finance from Elsevier |
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