Credit cards’ insidious allure

How Credit Cards Affect Our Brains—and Our Spending

Buying with plastic doesn’t just eliminate a barrier to buying. It actively encourages purchases, a study finds.

After repeated credit-card purchases over time, the brain learns to anticipate the rewards of credit-card shopping, according to recent research.PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

By Cheryl Winokur Mun May 1, 2021 1:00 pm ET

It’s been known for decades that credit cards encourage spending. But why that happens still isn’t entirely clear. New research offers some fresh insight into the causes—and how consumers might be manipulated in an increasingly cashless society.

Research on credit-card spending has tended toward the explanation that delaying payment removes a barrier to purchases in shoppers’ minds. A study published in February in Scientific Reports found evidence of another kind of trigger. Differences it found in brain activity between shoppers planning to use a credit card and those planning to buy with cash indicate that buying on credit doesn’t just ease shoppers’ inhibitions, it actively encourages purchases, the researchers say.

The upshot: When people are shopping with credit cards and see a product they like, the neural network in the brain that produces a sensation of reward perks up, which seems to create a craving to spend, says Sachin Banker, assistant professor at the University of Utah, who worked on the study as a Ph.D. student at the MIT Sloan School of Management.

“You’re basically feeling more reward when you shop with credit cards,” he says. “We don’t see that with cash. It was actually a very stark difference.”



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 everyday products over the course of three sessions and was asked whether they would buy each product at the stated price. Half the products were offered for purchase by credit card and half for purchase with cash. None of the products cost more than $50.

The differences in the shoppers’ brain activity support the hypothesis that after repeated credit-card purchases over time the brain learns to anticipate the rewards of credit-card shopping, according to the report. And that suggests that consumers could be conditioned to spend through the use of various sensory rewards in new payment systems, Dr. Banker says. For instance, with digital payments the use of particular sounds or vibrations on your smartphone when you make certain purchases but not others could, over time, teach your brain to anticipate rewards for buying specific products while you’re shopping.

Dr. Banker adds that further research could be done to see if the study’s theories hold true at higher prices. It also could study consumers who tend to overuse or misuse credit cards, to understand further why they act as they do. This study focused on people who mostly paid on time and used credit cards appropriately. Understanding brain patterns for other types of consumers could help lead to solutions that attempt to pre-empt harmful spending behavior, Dr. Banker says.

Ms. Winokur Munk is a writer in West Orange, N.J. She can be reached at reports@wsj.com.

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