New reseach by an economist teamed with two neuroscientists has shown that paying by credit card people actually:
"balance the immediate pleasure of the prospective possession of a product with the immediate pain of paying for it...Emotion is as capable of assigning such a value as reason. Buying on credit, though, may be different. The abstract nature of credit cards, coupled with the deferment of payment that they promise, may modulate the “con” side of the calculation in favor of the “pro”."
So impulse buying is more likely with credit cards than with cash. Makes sense to me. And now there is scientific evidence.
Do you think you would, or do, spend more when you use plastic than when you use cash?
On a related note.
Here is a NY Times article about women who use cash to to hide some extravagant purchases from their husbands.
22 comments:
mmmm... I agree with the Economist and the Neuroscientists that it is easier to not weigh the benefits of spending money using a debit card versus spending with cash... I think I've had like 3 or 4 overdrafts on my debit account so I pretty much just use cash now...but yeah...
i also have had many overdrafts...and that doesnt look very good, after all i do work that the bank where my account is. josh you are cool...we should go to Heros & Legacies again and overdraft our accounts.
Justin H 5th period
Checking to see if it will work this time
MelanieK02
I definitely believe that I would spend more money with a card than cash. I catch myself doing it a lot. I never go extravagent since I don't have that much money on my debit card account, but I do talk myself into buying a little extra since my card will cover it.
MelanieK02
I agree that it is easier to spend things with a credit card than with real money. This is so because you don't see the instant decline in your money with your credit card. However, you do easily see the decline in your money by using cash. Why go through this pain when you could just use credit and not worry about it at the moment; credit cards delay the stress.
Jeremy Green 5th Period
I believe that people are ikely to spend more with credit cards than with cash becaue the consumer does not see an instant decline in money on a credit card. Although I do not own a credit card I know what it is like to use my parents and it is extremely easier to spend more of what you dont see instantly.
Jeff G. /5th
I also agree that it is easier to be lenient with spending when using a credit card as opposed to using cash. I don't own a credit card either, so I think it's easier for me to limit my spending if I can look into my wallet and see how much I am allowed to spend before I don't have any money on hand. Credit cards do provide a means however to pay for something later rather than on the spot. I still stand firmly on using money when I can (though the coins do get a bit irritating....)
~Kim I. 5th Period
it is undeniably far easier to blow away money with a card than cash. its alot easir to watch ur card slide through the machine than it is to hand over a 20. however, the little stuff ads up...change...with cash i get back lots of coins...worthless to me. whereas a card takes the exact amount. with a card something that is 10.12$ im really spending 11 dollars for it...those small amounts of change add up...but not enough to outweigh the ease of a card.
Cameron K 5th
bad sentence... with cash the 10.12 costs 11$ not with the card
Cameron K 5th
I believe that I spend more money with the card then I do when I have cash. if i have cash i tend to question myself on do I really need whatever I am buying or not! So really I believe it is a personal prefrece on the situation!
Riley Trotter 1st
I suppose I am the odd one out here. Personally, I am more likely to spend money if I have it in cash because I typically think of cash as extra money that I don't really need, thus it gets allocated for recreational spending. I use cards for less frivolous but more expensive purchases. And since most of my purchases are not extravagant, I find it easier for myself spending cash more often than using a card.
Michael K. 2
As I see it, it is much easier to over spend with the "plastic" than with cash. With cash you see and also feel the money slipping from your fingertips. Using a credit card all you see is a reciept that you sign, and move on. Although there is a maximum amount of money you are allowed to spend, it does not necessarily mean you can afford it. Most times with a credit card you are spending money you don't have; that's one of the main reasons why people have them, whereas with cash when it's gone, it's gone.
Ethan H., 5th
I think it's much easier to pay with credit card than cash. When I pay with cash I have a visual of spending it, whereas with the credit card all I have to do is swipe the plastic and it seems like I;m not really paying for it becuase I dont see the transfer of cash for the product. Sarah Hobson 1st period
I think that credit cards are much more likely to cause you to spend more money. It is much easier to spend money that you don't have to see. Cash is much more impactful in the aspect of saving.
kinziej 5th
I definately spend more on my debit card compared to when I shop with cash. When I use the card I notice the monetary worth of my purchase alot less than when I can physically see the cash in my wallet quickly deminish.
Brandon H.
5th Period
I am likely to spend more money when using a debit card as apposed to using cash due to the satisfaction that comes with still having cash in my wallet. Also, I feel cooler and more grown up when I use a debit card ... even though it's probably my mothers, seeing as i lost mine. :]
Jera J.
5th Period
Over time having a credit card can have a devistating toll on one's expenses, however a debit card still is not much better (even if you have a significantly large overdraft protection in you account). Maybe we should all just have microchips implanted in our hands that determined how much we are worth....a cashless society.
Matt W 5th
Actually the microchip idea is not that far fetched and has been discussed. The question is "How would our purchasing behaviors change if all we had to do is pick up the product and walk out the store door?" Would we need time to adjust to this - would we over spend initually? Would pickpockets start cutting off arms? Would this microchip inplant in my hand be compatible with the one the CIA already has in my head? So many questions to ponder.
McKay
When answering the question of if it is easier to spend money on a card compared to cash. The popular answer is oviously proven by the comments previously commented. The majority of them saying that it is easier to spend money on a card, but i will conclude by saying that the main reason for this, in my opinion, is due to have cash available. Although cards are very popular around town, cash is always accepted!
Sterling S. (2nd)
Sure, a credit card is eaasier to use than cash, but riddle me this, Which one has the higher interest rate?
Jessica 5th Period
Well, I noticed when I didn't use my debit card for a long time(because I didn't have too much in there and I wanted to keep a minimum of at least $50 in my account) I just spent cash from my paycheck after I payed what I needed to in insurance/class ring/tithe/and other useless things. Just like so many other people have said, I do tend to spend more money more frequently with my debit card when I don't have any cash on me because it's just so much more simpler(grammer check-and spellcheck grammer? lol, man, I'm out of it) to swipe the plastic card, punch in a pin number, and be on my way. Before Christmas I deposited a check for $240. I spent about $65 of it on some Christmas gifts and maybe up to $40 more on a birthday present for someone. This last week when I went to the bank I had $75 in it....I ask myself how could all that money be gone when I never used my card and just spent cash....I don't know where it went except to people who I gave it to...disturbing how the green stuff goes as quickly as it comes. Am I right? Does the wind blow all of the bills off of that beautiful money tree for you too? My tirade now dies. The end...
Definitely! I can manage much more self-control when I realize my wad of cash is thinnig. With a credit card those things are not noticeable. The guilt factor is reduced.
Caitlan G.-5th
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