The other day I was on my way to the supermarket to buy food I stopped at a clothes shop, I could not resist to just “have a look”…of course I filled my trolley with lots of on sale things jeans, pulls, bag, shoes etc….I started queueing and when it was my turn to pay the 79£ ( that I was planning to pay by credit card)the cashier said to me: “I only accept cash, the machine is not working at the moment” (luckily) I had enough cash on me. I took the banknotes out of my wallet and as I was counting 10£, 20£, 50£…something happened..I was actually feeling a sort of pain, I was realizing the actual transaction of my money going out of my pocket to someone else. This strange sensation made me rethink about what I was about to buy ( do I really need those things?) so I started to leave behind some of the stuff I was going to buy and finally paid 32£.
I began to wonder why I was willing to pay 79£ on my credit card without thinking twice but when paying by cash (which meant no difference at all, but the physical act of giving something) made think that it was quite a lot of money for things that I didn’t really need.
So, was my consumer behaviour affected by the method of payment I used? I began to search for reasons underneath this behaviour and I came across to the Pain of paying (not having a psychology background it was quite a discovery from me).
The Pain of paying is basically the pain you feel when physically anticipates having to pay for something and you become more conscious about prices (how much you pay).
On the Monopoly Money: The Effect of Payment Coupling and Form on Spending Behaviour on Journal of Experimental Psychology: Applied Copyright 2008 by the American Psychological Association 2008, Vol. 14, No. 3, 213–225 argued that the Pain of paying was affected by timing and the method of paying by cash,, credit card, gift certificate etc..
I agree with the following quote:”Credit cards effectively anaesthetize the pain of paying,” said George Loewenstein, (Carnegie Mellon) when using cards the pain of paying is reduced compare to cash payments.
So, here is my resolution for next week leave my credit card at home and only use cash (setting a reasonable budget)…to be continued.