Neural mechanisms of credit card spending

Abstract Credit cards have often been blamed for consumer overspending and for the growth in household debt. Indeed, laboratory studies of purchase behavior have shown that credit cards can facilitate spending in ways that are difficult to justify on purely financial grounds. However, the psychologi...

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Autores principales:	Sachin Banker, Derek Dunfield, Alex Huang, Drazen Prelec
Formato:	article
Lenguaje:	EN
Publicado:	Nature Portfolio 2021
Materias:	Medicine R Science Q
Acceso en línea:	https://doaj.org/article/6a56b021209e44849a42c1e801300242
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spelling	oai:doaj.org-article:6a56b021209e44849a42c1e8013002422021-12-02T14:21:59ZNeural mechanisms of credit card spending10.1038/s41598-021-83488-32045-2322https://doaj.org/article/6a56b021209e44849a42c1e8013002422021-02-01T00:00:00Zhttps://doi.org/10.1038/s41598-021-83488-3https://doaj.org/toc/2045-2322Abstract Credit cards have often been blamed for consumer overspending and for the growth in household debt. Indeed, laboratory studies of purchase behavior have shown that credit cards can facilitate spending in ways that are difficult to justify on purely financial grounds. However, the psychological mechanisms behind this spending facilitation effect remain conjectural. A leading hypothesis is that credit cards reduce the pain of payment and so ‘release the brakes’ that hold expenditures in check. Alternatively, credit cards could provide a ‘step on the gas,’ increasing motivation to spend. Here we present the first evidence of differences in brain activation in the presence of real credit and cash purchase opportunities. In an fMRI shopping task, participants purchased items tailored to their interests, either by using a personal credit card or their own cash. Credit card purchases were associated with strong activation in the striatum, which coincided with onset of the credit card cue and was not related to product price. In contrast, reward network activation weakly predicted cash purchases, and only among relatively cheaper items. The presence of reward network activation differences highlights the potential neural impact of novel payment instruments in stimulating spending—these fundamental reward mechanisms could be exploited by new payment methods as we transition to a purely cashless society.Sachin BankerDerek DunfieldAlex HuangDrazen PrelecNature PortfolioarticleMedicineRScienceQENScientific Reports, Vol 11, Iss 1, Pp 1-11 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Medicine R Science Q
spellingShingle	Medicine R Science Q Sachin Banker Derek Dunfield Alex Huang Drazen Prelec Neural mechanisms of credit card spending
description	Abstract Credit cards have often been blamed for consumer overspending and for the growth in household debt. Indeed, laboratory studies of purchase behavior have shown that credit cards can facilitate spending in ways that are difficult to justify on purely financial grounds. However, the psychological mechanisms behind this spending facilitation effect remain conjectural. A leading hypothesis is that credit cards reduce the pain of payment and so ‘release the brakes’ that hold expenditures in check. Alternatively, credit cards could provide a ‘step on the gas,’ increasing motivation to spend. Here we present the first evidence of differences in brain activation in the presence of real credit and cash purchase opportunities. In an fMRI shopping task, participants purchased items tailored to their interests, either by using a personal credit card or their own cash. Credit card purchases were associated with strong activation in the striatum, which coincided with onset of the credit card cue and was not related to product price. In contrast, reward network activation weakly predicted cash purchases, and only among relatively cheaper items. The presence of reward network activation differences highlights the potential neural impact of novel payment instruments in stimulating spending—these fundamental reward mechanisms could be exploited by new payment methods as we transition to a purely cashless society.
format	article
author	Sachin Banker Derek Dunfield Alex Huang Drazen Prelec
author_facet	Sachin Banker Derek Dunfield Alex Huang Drazen Prelec
author_sort	Sachin Banker
title	Neural mechanisms of credit card spending
title_short	Neural mechanisms of credit card spending
title_full	Neural mechanisms of credit card spending
title_fullStr	Neural mechanisms of credit card spending
title_full_unstemmed	Neural mechanisms of credit card spending
title_sort	neural mechanisms of credit card spending
publisher	Nature Portfolio
publishDate	2021
url	https://doaj.org/article/6a56b021209e44849a42c1e801300242
work_keys_str_mv	AT sachinbanker neuralmechanismsofcreditcardspending AT derekdunfield neuralmechanismsofcreditcardspending AT alexhuang neuralmechanismsofcreditcardspending AT drazenprelec neuralmechanismsofcreditcardspending
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Neural mechanisms of credit card spending

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