The “framing effect”

The order in which a message is set out, the way information is presented (as a half-full or a half-empty glass), the attributes of the communicator of the message, the credibility of the information source and the context in which the communication is made are all factors that affect our choices: the wrapping matters!

This phenomenon is known as the “framing effect”. It is well known in the marketing world and is used to influence consumption decisions, including decisions to purchase banking products.

The advertising of financial products is subject to specific regulations to protect users. The Banco de España supervises compliance by reviewing banks’ advertising. However, despite the existence of regulation and supervisory authorities we consumers still need to carefully analyse the advertising for banking products before making any decisions.

At this time of year when we tend to buy more than normal, we suggest two strategies for “keeping your head” and avoiding the framing effect:

  • STRATEGY 1: If you are thinking of buying goods or services, such as a holiday, an electronic gadget or a car, examine the terms and conditions of the financing offered, and make sure you read the small print!
  • STRATEGY 2: Take particular note of the APR, because, whatever the nominal interest rate, if the APR is positive, the financing involves a cost. Use our simulator.


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