Preventing Over-Spending: Increasing Salience of Credit Card Payments through Smartphone Interventions

Abstract

Credit card related over-spending represents not only an issue on the individual level, but also a growing societal burden. For example, consumers spend over $70bn in interest fees annually in the US alone. As mobile-mediated information systems have been proven effective in behavior change interventions, this study investigates the efficacy of a novel smartphone application to increase the salience of credit card usage. It seeks to motivate credit card users to save money by lowering expenditures, a desirable behavior preventing possible over- spending. In particular, the app suggested weekly saving goals and measured the respective effect of increased transaction salience on spending behavior. The preliminary results from the pre-study cohort (N=95) suggest that increased salience significantly lowers expenditures. We plan a large-scale study (N>1’000) to further examine the relationship between transaction salience and spending volume for low-transparency payment methods such as credit cards.