When paying for goods and services, the modern world of consumer technology is always moving in the direction of more efficiency and ease of transactions. From the advent of merchant processes for checking out, to online shopping, to the now popular tap-and-go form of payments, it is apparent that the check out process in any business service and industry is becoming easier. With the rise of efficiency, this goes hand in hand with the rise of spending, and profits, so there’s no wonder that businesses are getting on board in the latest technologies for their business procedures.
In related to spending habits of people with these new technologies, the rise in spending is correlated to the ease of paying with credit cards. In the use of cash, this tangible payment method is something that people can visually see and touch and know when it is leaving their wallet. In a credit card based payment, people are more cut off from the effect of spending, and therefore, generally spend a lot more.
Quite a few studies have been dedicated to examining this trend of spending more with credit cards. When researching the notion of impulse buying, it was found that people who pay with cards are less likely to be hindered from the instant gratification of paying. When cash is involved, there is a larger chance of people being pulled out of this mindset and thinking on the purchase more. Another study indicated that when people assess the benefits and costs of a purchase, those that pay with credit cards are more likely to focus on the benefits over the costs. This makes sense, as in the credit card functioning, the cost is something we think about later, when we receive the bill at the end of the month.
Since it is apparent that the ease of using credit cards leader to greater spending, then for those shoppers on a budget, it is advised to try out switching your card for cash, or to keep tabs with your spending by using tools such as an application on your phone to follow your spending behavior as you buy.