Kellogg School of Management at Northwestern University

Public-Private Interface

Plastic Problems

A 2009 act passed by U.S. Congress requires credit card companies to print two payoff scenarios on monthly statements. But the addition of a second scenario—a three-year payoff plan—might prompt a debtor to make a smaller monthly credit card payment, even if they have the ability to pay more. This is because credit card users view the monthly payment offered under a three-year payoff plan as a cue for what they ought to pay. New research shows that when it comes to people digging themselves out of debt, less information might mean more savings. More →