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Dirty Cash for the Dull Stuff, Plastic for the Fantastic

People who pay cash focus on different aspects of products than people who use credit cards, according to a new study in the Journal of Consumer Research.

Although previous research has already proven that consumers are willing to pay more when they use credit cards instead of cash, the authors (Promothesh Chatterjee (University of Kansas) and Randall L. Rose (University of South Carolina)) found that consumer perception of products is also affected when thinking about paying with one or the other.

consumers are willing to pay more when they use credit cards instead of cash

The authors note that consumers develop mental associations about credit cards and cash from early ages. Credit card advertising, for example, links the use of credit cards with highly desirable products and lifestyles and immediate gratification. Cash, on the other hand, is closely linked to the pain of payment.

highly desirable products and lifestyles and immediate gratification

"While convenient, credit cards do not encourage consumers to deliberate over their spending behavior," the authors write. "Our findings suggest that marketers may be affecting not just the amount of money consumers are willing to spend but also the nature of the goods and services that find their way into consumers' market baskets."

Source: University of Chicago Press Journals

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