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Does the visual salience of credit card features affect choice?

Published online by Cambridge University Press:  20 April 2021

Matthew D. Hilchey Open the ORCID record for Matthew D. Hilchey [Opens in a new window] ,
Matthew Osborne  and
Dilip Soman
Matthew D. Hilchey*
Affiliation:
Rotman School of Management, University of Toronto, Toronto, ON, Canada
Matthew Osborne
Affiliation:
Rotman School of Management, University of Toronto, Toronto, ON, Canada Department of Management, Suite 2200, University of Toronto Mississauga, Mississauga, ON, Canada
Dilip Soman
Affiliation:
Rotman School of Management, University of Toronto, Toronto, ON, Canada
*
*Correspondence to: Rotman School of Management, University of Toronto, 105 St. George St, Toronto, ON, Canada M5S 3E6. E-mail: matthew.hilchey@rotman.utoronto.ca
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Abstract

Regulators require lenders to display a subset of credit card features in summary tables before customers finalize a credit card choice. Some jurisdictions require some features to be displayed more prominently than others to help ensure that consumers are made aware of them. This approach could lead to untoward effects on choice, such that relevant but nonprominent product features do not factor in as significantly. To test this possibility, we instructed a random sample of 1615 adults to choose between two hypothetical credit cards whose features were shown side by side in tables. The sample was instructed to select the card that would result in the lowest financial charges, given a hypothetical scenario. Critically, we randomly varied whether the annual interest rates and fees were made visually salient by making one, both, or neither brighter than other features. The findings show that even among credit-savvy individuals, choice tends strongly toward the product that outperforms the other on a salient feature. As a result, we encourage regulators to consider not only whether a key feature should be made more salient, but also the guidelines regarding when a key feature should be displayed prominently during credit card acquisition.

Keywords

attentionvisual saliencefinancechoicemandated disclosurescredit cards
Type
Article
Information
Behavioural Public Policy , Volume 7 , Issue 2 , April 2023 , pp. 291 - 308
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

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