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We test a nudge in a field experiment on credit cards. The nudge
shrouds the Autopay enrollment option for cardholders to automatically
pay exactly the credit card minimum payment each month.
After six months, the nudge decreases the fraction of cardholders
who only pay exactly the minimum by 23%. However, the nudge
does not significantly reduce credit card debt. Nudged cardholders
often choose Autopay amounts that are only slightly higher than
the minimum payment. The nudge reduces Autopay enrollment,
which increases missed payments. The nudge reduces manual payments
by Autopay enrollees. Cardholders frequently lacking liquid
cash best explains our results.
