Topics  |  Early Intervention and Credit Cardholders: Results of Efforts to Provide Online Financial Education to New-to-Credit and At-Risk Consumers

Cardholders who fail to make on-time payments and subsequently fall delinquent on their accounts not only jeopardize their own credit ratings but also cause financial losses for card issuers. To test whether early intervention, such as reminder calls, mailings, and credit education, could help prevent delinquencies, three credit card issuers conducted pilot projects offering special services to cardholders deemed at risk of delinquency and those who were new to credit, such as college students. The pilots, conducted under the auspices of the Responsible Credit Roundtable, were not entirely conclusive but did suggest that integrating financial education into cardholder relationships can be a good business strategy. This paper reports the results of those tests.