Ethics in financial advertising: a study on direct mail for credit cards

Abstract

Two experiments were conducted to explore the extent to which disclosing minimum required payment in a credit card company’s direct mail advertisements to college students influenced perceived trust and brand attitude in the target audience. In Experiment 1, we discovered that a more ethical 5% minimum payment requirement was perceived to be less ethical than both a 1% minimum payment requirement and even the self-serving practice of withholding information about minimum payment requirement. We attributed this unintended effect to a lack of both credit card knowledge and long-term orientation in our sample. In Experiment 2, we discovered the intended effect of the more ethical 5% minimum payment requirement when the participants were motivated to digest and understand supplemental information about interest compounding. In other words, socially responsible initiatives are likely to be appreciated by the target audience only if they have the ability and motivation to elaborate the true merits of these initiatives.