Online education tools help improve financial literacy

A new study conducted in the US by Wells Fargo, in partnership with Visa, has shown dramatic improvements in financial literacy as a result of an early online education intervention. 

The study invited new college student credit cardholders to participate in an online education programme to increase awareness of building good credit. The programme, hosted on Visa’s ‘Practical Money Skills for Life’ website, consisted of two lessons and quizzes designed to improve the cardholders’ understanding of responsible borrowing and credit management and demonstrate the effects of this education on their credit behaviour.

The results showed that students who responded to the invitation and completed the lessons (3,563 in total) did remarkably better on a number of credit related metrics than those who did not, this included:

•  51.2% less likely to file for bankruptcy
• 45.1% less likely to be 60 days past due date
• 22.8% less likely to have late fee accounts
• 20% fewer revolving monthly balances (even though use of credit cards increased)

Providing learners with online education environments, especially ones that include games, other competitive opportunities and potential interactions with peers are increasingly being used by financial institutions to help increase knowledge, build skills and encourage responsible financial behaviour. One example being used extensively across the UK is Nationwide Building Society’s ‘Nationwide Education’ personal finance programme for ages 4 to 18+.

Read the full report and visit Nationwide Education.

Nicki, Business Director, dbda