Information disclosure and credit card repayments: evidence from Malaysia

Abstract

PurposeThis study analyzes the role of information disclosure in influencing credit card repayments by focusing on three intervention methods for improving repayment decisions among credit cardholders.Design/methodology/approachThis study uses the survey method to collect data. Four questionnaires are designed to identify which types of disclosure elicit better repayment decisions among credit cardholders. The participants were approached using the mall intercept method, and a total of 1,775 responses were obtained.FindingsEstimations using means comparison tests show that not providing minimum payment information improves repayments. The expected benefits are not delivered by the provision of higher minimum payment information or additional information that highlights the negative effects of making the minimum repayment only. Further analysis using logit estimation reconfirms the benefit of not providing minimum payment information. However, when such information is given, low minimum payment information elicits better repayment decisions than high minimum payment information or additional information. Repayment worsens under the additional information condition compared to the high minimum payment condition.Research limitations/implicationsThe findings of this study have a bearing on the decisions of policy makers, credit card issuers and consumers.Originality/valueThis paper clarifies the role of information in improving debt repayment decisions.