Using loan plus lender literacy information to combat one-sided marketing of debt consolidation loans

Lisa E. Bolton, Paul N. Bloom, Joel B. Cohen

Research output: Contribution to journalArticle

22 Scopus citations

Abstract

The marketing of debt consolidation loans is intended to offer a financial remedy to consumers faced with mounting debt and credit problems and unable to meet their monthly payments. The authors argue that debt consolidation loan marketing overemphasizes the short-term benefits (e.g., lower monthly payments) and downplays the considerable downside of these loans (e.g., longer repayment and more total interest paid). Two experiments demonstrate that a financial literacy intervention combining information about loans and lenders can help consumers understand and respond to debt consolidation loan marketing (whereas a basic financial numeracy intervention does not). Implications for consumers, marketers, public policy makers, and researchers who work in the area of financial literacy are discussed.

Original languageEnglish (US)
Pages (from-to)S51-S59
JournalJournal of Marketing Research
Volume48
Issue numberSPEC. ISSUE
DOIs
StatePublished - Dec 12 2011

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Economics and Econometrics
  • Marketing

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