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Interesting psychological phenomenon: Why is it easier to shop with a credit card?
In the modern consumer society, many people feel relatively relaxed about the experience of using credit cards to shop, which reflects some interesting psychological phenomena.According to the research of the famous behavioral economist Richard Thaler, this phenomenon can be explained by "mental accounting."Psychological accounting is a model of consumption behavior that attempts to portray how individuals encode, classify and evaluate economic outcomes.
"All organizations, from GM to individual households, often have clear and/or implicit accounting systems. Accounting systems often influence decision-making in unexpected ways."
The basic concept of psychological accounting is that when an individual faces funds, he does not regard it as a whole, but divides it into different "psychological accounts".For example, someone might compile one account for daily expenses and another for savings, and this division helps them control their consumption behavior to some extent.
When people use credit cards instead of cash payments, it is actually delaying the "payment pain" caused by spending.Psychologically, this delay reduces the distress of payments, as combining the amount with a huge credit card bill makes the difference in spending per exchange feel smaller.For example, if a person sees $120 on his credit card bill turn into $125, the former has a significantly lower psychological cost than spending $5 out of $50 to buy a T-shirt.
"A larger amount may make consumers feel more painful than taking a $30 T-shirt out of a $50 pocket."
Most of this phenomenon stems from the psychology of "loss aversion", that is, people's response to losses is stronger than the response to equal amounts of gain.Therefore, in consumption, "paying pain" makes people face greater psychological burden when shopping with cash, and choosing to use credit cards naturally becomes more popular.
Another reason for using credit cards comes from the concept of "transaction value", that is, consumers' feelings about satisfactory transactions.If the price paid is lower than the preset price in their minds, they will relatively consider the transaction as a victory, and if the amount paid is equal to or higher than this reference point, they will feel the "trading pain".While the amount does not decrease when using a credit card, its perception of the overall bill affects their shopping experience.
"Psychological accounting challenges the principle of capital equivalence in traditional economic theory, especially in the behavior of consumption and savings."
The influence of this psychological accounting has also been widely used in marketing.When formulating market strategies, companies can take advantage of consumers' reactions to different charging methods.For example, independent promotions and bundlings can inspire consumers to actually buy behavior, so that they can feel less pain even when facing money spending.
In fact, the principle of psychological accounting has also been applied by the government in public economic policies.When consumers or voters face decision-making, perceptions of cognition and outcomes are often affected by psychological account division.For example, when discussing tax reform, we can effectively understand how social groups use budgets and formulate a more reasonable public resource allocation plan.
In general, the feeling of relaxed shopping with a credit card is the result of the interweaving of many psychological phenomena.In this process, consumers invisibly conduct complex psychological accounting, minimizing the "pain" feeling of every shopping.But this also triggered an important thought: under this convenient appearance, have we ignored the long-term financial risks that credit card consumption may bring?
