How credit cards affect our brains and our spending
It has been known for decades that credit cards encourage spending. But Why what is happening is still not entirely clear. New research offers new insight into the causes and how consumers might be manipulated in an increasingly cashless society.
Research on credit card spending tends to explain that deferring payment removes a barrier to shopping from the minds of buyers. A study published in February in Scientific Reports found evidence of a different kind of trigger. The differences he found in brain activity between buyers who plan to use a credit card and those who plan to buy with cash indicate that buying on credit not only relieves buyers’ inhibitions, it actively encourages purchases, researchers say.
The result: When people buy with credit cards and see a product they like, the neural network in the brain that produces a sensation of reward increases, which seems to create an urge to spend, says Professor Sachin Banker. assistant to the University. from Utah, who worked on the study as a doctoral student. student at MIT Sloan School of Management.
“Basically, you feel more rewarded when you shop with credit cards,” he says. “We don’t see this with money. It was actually a very clear difference.
The researchers used a form of magnetic resonance imaging to measure the brain activity of the study subjects as they participated in a shopping exercise. Each participant was shown a total of 84 common products over three sessions and asked if they would purchase each product at the price listed. Half of the products were offered for purchase by credit card and the other half for purchase in cash. None of the products cost more than $ 50.
Differences in the brain activity of shoppers support the hypothesis that after repeated credit card purchases over time, the brain learns to anticipate the rewards of credit card purchases, according to the report. And this suggests that consumers could be conditioned to spend through the use of various sensory rewards in new payment systems, says Dr Banker. For example, with digital payments, using particular sounds or vibrations on your smartphone when you make some purchases but not others might, over time, teach your brain to anticipate the rewards for the. purchase specific products while you shop.
Dr Banker adds that more research could be done to see if the theories in the study hold true at higher prices. He could also study consumers who tend to abuse or misuse credit cards, in order to better understand why they behave the way they do. This study focused on people who paid mostly on time and used credit cards appropriately. Understanding the brain patterns of other types of consumers could help find solutions that attempt to prevent harmful spending behaviors, says Dr. Banker.
Ms. Winokur Munk is a writer in West Orange, NJ. She can be reached at [email protected]
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