The Easier It Is To Pay, The More People Spend
Many studies have demonstrated the greater willingness of consumers to spend when purchases are being made using credit instead of cash. But the psychology behind credit cards may run deeper than that.
Paying for something using a credit card is oh so easy. A swipe, a signature and that’s that – the reality of spending money may seem hazy given the absence of handling and counting out cash or subtracting a figure from an entry in a checkbook. Many studies have been completed which provide plenty of evidence that consumers spend more when shopping with a credit cards as opposed to cash.
A new study completed by the assistant professor of marketing at the University of Kansas, PromotheshChatterjee, and the chair and professor in the Moore School of Business at the University of South Carolina Randall L. Rose, that was recently published in the Journal of Consumer Research discovered that credit cards influence not only how consumers spend, but also the overall feelings about whatever it is that they are buying. According to the study, when purchasing using plastic shoppers tend to focus more on the positive parts of the sale while ignoring details such as cost and the necessity of the item. By not paying any mind to those important details, consumers overspend and end up buying unnecessary things.
Using a credit card at the register is considered to be an “abstract payment,” as opposed to the more tactile experience of pulling cash out from a wallet
According to Art Markman, the Professor of Psychology and Marketing at the University of Texas at Austin, “What happens when you think of things abstractly is you tend to focus on the overall benefits of something.”
This means that people buying items stuff with credit are concentrating on the benefit of what they are buying while not giving enough consideration to specifics like how they plan to pay for their purchase and whether or not they will actually use it.
Credit cards are so widely favored that they are increasingly replacing checks and cash. The advent of mobile wallets is effectively furthering the distance between cost and transactions and placing the burden upon consumers to tally up the amount being spent in their heads. While this won’t pose a challenge for everyone, people should be aware of the potential problems that may arise from this system. As technological advancements are making it easier and easier for consumers to pay, they are also making it easier for them to spend.
Latest Other Card News
Walmart is finally ready to introduce a new subscription service offering free same-day delivery and fuel discount. Walmart+ was supposed to go live back in July, however, it was delayed due to the COVID-19 outbreak. Now the launch is planned to take place on September 15. The new product will help you order any goods […]
This month, American Express introduced its new tool called MyCredit Guide. The Amex website says: “We believe everyone should know their credit score and have the tools to understand it better.” That’s why the new feature was developed. Using the tool, you can find out your credit score and take a look at your credit report, […]
A virtual credit card is a unique credit card number that is linked to your main credit card account but is different from the physical card number. The virtual credit card number allows to shop online or over the phone without using your physical credit card. The numbers can usually be used once and expire if not used. The cardholders can also delete the numbers if they want or need to.
The results of the 2019 Debit Issuer Study, commissioned by PULSE®, a debit/ATM network, and conducted by Oliver Wyman, a global management consulting firm, show that consumer debit use has skyrocketed in the last year and will keep soaring. In 2018, the number of debit transactions increased by 6.7% reaching more than 68 billion. According […]
Yesterday, on October 28, Uber introduced their new team – Uber Money. According to the official website, it is supposed to work on financial products and technologies to let their customers access, manage, and grow money easier and faster. Uber is expected to develop several new features, as well as make enticing improvements to existing […]