Pain of Paying Cash
Numerous studies have now repeated demonstrated that consumers who regularly use plastic for their purchases spend between 12-50% more (depending on the venue) than their cash-paying counterparts.
This phenomenon is known as the pain of paying cash. It is believed that direct loss of money causes our subconscious minds pain, so in an attempt to minimize the damage, we spend less. Thus, knowing that the money is coming out of our accounts serves as a motivator for us to spend less. By purchasing items on credit, there is a disconnect between purchasing and paying. When the financial pain is delayed to the end of the month, such as when one receives his or her monthly credit card statement, there is less motivation to curtail spending. Read article here