Using a credit card induces euphoria, new research shows

For all of you out there that get a rush out of using your credit card this MSNBC post may explain why.  According to the article using a credit card ignores the actually pain of paying for something in lieu of using hard cold cash.  Unless you pay off your credit card each month I can see where this makes plenty of sense.  Paying with the credit card just delays the pain but you get the immediate joy of the purchase.


From the article

• Credit cards take us out of our right minds, inducing a kind of euphoria that makes people ignore the downsides to purchases, suggests a new study in the Journal of Consumer Research. 
• “Our research suggests that, when it comes to product evaluation, beauty truly lies in the eyes of the cardholder,” the authors say in the report.
• It's long been observed that consumers spend more when paying with plastic than cash, a phenomenon known as the "credit card premium." But there hasn’t been much research devoted to why, said Chatterjee. It's generally been presumed that consumers who feel the pain of dollar bills leaving their hands spend less than those who zoom through checkouts with just a swipe. But Chatterjee argues that something much deeper is going on.
• "The effects of credit cards go far beyond increasing consumer spending power and shifting consumption from the future to the present; fundamental product perceptions are affected as well,” Chatterjee says in the report.
• "I hardly ever carry cash and as a consequence I keep buying things I don't really want,” he said. “I'm not even thinking about the cost, I'm so consumed with the benefit of what I’m getting. It has been bugging me for a long time. People do not realize how their payment mechanism influences behavior."