*Special Thanks to Maura Farver from the Common Cents Lab at the Center for Advanced Hindsight for lending her big. bright. mind. to this team.
Problem:
How might we help members who are struggling with debt pay off their debt faster?
Solution:
Small Bites is a credit card repayment solution that uses behavioral science to improve a person’s comfort, consistency and success with paying down credit card debt.
Testing Results:
Testing was developed and conducted with the assistance of the Common Cents Lab at the Center for Advanced Hindsight, a research center with Duke University. A survey was distributed by three credit unions to between 12,000 and 20,000 members depending on credit union size. Half of the selected members have a credit card with the participating credit union and half did not.
We asked a series of questions to identify the scope of credit card debt among credit union members and how people made their payments. We then presented a short video highlighting our product and asked follow up questions to determine interest in the product.
These are some of the key results that supported or guided our development:
- 51% indicated that they are currently carrying credit card debt month to month. 75% indicated that they have at some point carried a balance. This proved that there is a need for credit card pay down solutions
- Only 4% of respondents who were carrying a credit card balance were interested in a weekly payment option. Most respondents (58%) who are carrying balances preferred a payday alignment. Our prototype was modified to allow users to modify frequency.
- When asked how much they would pay if they paid weekly versus monthly, respondents with credit card debt indicated that they would pay an average of 74% more than the minimum payment amount. This proves that there is some flexibility in amounts paid and we added the option for the member to “nudge” payments up or down.
- When asked if they would use Small Bites or suggest it to a friend, more than half of the respondents who are carrying debt indicated that they were somewhat likely or very likely to use/recommend it. This supports the idea that a simplified credit card repayment solution is of interest to credit union members.