Imperfect Recall: The Impact of Composite Spending Information Disclosure on Credit Card Spending


In the past 30 years, consumer credit card debt has expanded tremendously. We know that consumers willingly pay more for the same product when using credit cards versus cash, contrary to the classical rational agent model. Research suggests that it happens due to three imperfections in the classical model: imperfect self-knowledge, imperfect willpower, and imperfect recall. Traditional solutions to credit abuse address the first two imperfections; we examine the third. We propose reminding consumers, on every receipt, how much they have spent cumulatively. We test the effect of this proposal on spending via a controlled experiment. We find that printing this additional information on credit card receipts leads to a significant 9.6% reduction in overall spending compared to the status quo. We discuss the public policy implications of this finding as well as implementation issues.

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    We use a one-tail t test because we hypothesized that users of the expanded receipt version would spend specifically less than the control group, not simply a different amount (Mendenhall and Sincich 2003).


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Partial funding for this research was provided by J Whitney College of Business Summer Research Grant.

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Correspondence to Timucin Ozcan.

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Poddar, A., M. Ellis, C. & Ozcan, T. Imperfect Recall: The Impact of Composite Spending Information Disclosure on Credit Card Spending. J Consum Policy 38, 93–104 (2015).

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  • Credit card spending
  • Consumer debt
  • Credit abuse
  • Imperfect recall