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  • Shot #68 : Cash or Credit Card, what makes consumer spend more?

Shot #68 : Cash or Credit Card, what makes consumer spend more?

The Pain of Paying Experiment

January 24, 2023

Hello amazing marketers,

This is Luv and here’s your weekly marketing shot :) (Delivered every Tuesday)

Have you heard of the "Pain of Paying" experiment? It's a pretty famous one from a book called Predictably Irrational by Dan Ariely.

Basically, Ariely and his team had people buy things like chocolate and mugs using either cash or credit. They found that using cash made people feel more pain when paying while using credit cards made it feel less real.

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(#collab)

It's because when we use cash, we physically hand over the money and see how much we're spending.

It creates this "loss aversion" feeling where we don't like losing something.

But when we use credit cards, we don't see the money leaving our hands and the payment is delayed, so it doesn't feel as real.

This makes us more likely to spend more money.

They also found that using credit cards makes us more likely to make impulse purchases and buy more expensive stuff because the cost doesn't feel as real.

fin.

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(If you wish to read previous shots, check here- MarketingShots)

Thanks,