Red Tape – Using a Credit Card Induces Euphoria, New Research Shows

November 17, 2011
By Bob Sullivan

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.

Like a starry-eyed new lover who ignores the downsides of an obviously incompatible but very attractive partner, consumers who swipe plastic when they buy are often blinded to the true costs of their purchases.  They even tend to exaggerate the perceived benefits of whatever they’re buying, according to research by Promothesh Chatterjee of the University of Kansas and Randall L. Rose or University of South Carolina.

To put it another way:  Buying things with credit cards is more like lust than love.

Buying with cash, however, makes people focus on the pain of a purchase — not just the costs, but other downsides of the purchases, such as a product’s limitations.

“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.  (Read Full Article)


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