While most people associate credit cards with temptation and overspending, a new study provides evidence that your brain offers a sense of reward that is much more active when buying with plastic compared to cash. In fact, the results of the study show that regular credit card purchases actually result in spending, and this is all the more reason to review our own credit card habits.
Blame our weak Pavlovian brain
Study participants had their brains scanned while shown dozens of everyday products and were asked if they would buy each product at the advertised price with their own actual money, either in cash or credit cards. The results are in line with other empirical studies that have shown that people are more willing to buy more expensive items with plastic rather than cash.
While this is by no means final (the sample size is small and unchanged, and the amounts were capped at $ 50), the study’s results confirmed the hypothesis that the brain learns to anticipate the joys of credit card shopping after repeated credit card purchases over time ( In the unique formulation of the study, we are “chronically sensitized through previous experience with credit cards”).
These agrees with other studieswho have shown dopamine pleasure comes from the expectation of the reward, not just the actual reward.
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Interestingly, the study also shows that expectation of rewards increased when participants were exposed to purchase indications such as Visa and Mastercard logos the WSJ suggestshas an impact on digital spending:
This suggests that consumers could be conditioned to spend by using various sensory rewards in new payment systems. For example, with digital payments, certain sounds or vibrations on your smartphone can be used when you make certain purchases, but not others, teaching your brain time to anticipate rewards for purchasing certain products while shopping.
How to make credit card purchases less rewarding
Resisting impulse buying isn’t always easy, but being aware of your spending habits will go a long way. Once you have a set pattern for your shopping, try pausing this routine for a while and see if it has any effect. Some suggestions include:
- Establish a blanket 24-hour rule for potential discretionary purchases (I personally swear by this rule – it works most of the time).
- Remove automatically saved credit card numbers from your browser. Steps for most browsers can be found here.
- Keep track of your balance, keep debit cards for discretionary purchases, and leave your credit card at home.
- Don’t use apps that will improve your spending. The most famous example could be the exploding confetti for any successful trade on the Robinhood (The company recently retired from this role).
- Stick to a set budget, but include a fixed amount for discretionary spending (as you are more likely to follow a realistic budget).
