I saw an article on MSNBC.com that really drew my attention – 8 reasons you spend too much. Guess what was number one on the list? If you guessed using credit cards then you’re right so put away the plastic!
Multiple studies, including this 2008 study published in the Journal of Experimental Psychology, have found consumers are willing to spend more when they pay with a credit card instead of cash. “Credit cards allow consumers to focus more on what they’re getting, or buying, than what they’re losing, or spending,” explains Kit Yarrow, a professor of psychology and marketing at Golden Gate University. Credit cards “buffer the reality of spending because they leave more cash in our pockets and purses and provide a delay before payment is required.”
When you buy something with cash, you feel as if someone is trying to take something away from you – your money! If you swipe a credit card your brain doesn’t register this immediate loss of something that is yours.
So what else made the list of reasons why you spend too much money?
- Listening to music
- Buying in bulk
- Dieting
- Tracking exact costs
- Buying clearance merchandise
- Shopping without a list
- Falling for clever pricing tactics
So what’s your downfall?
