Credit cards

November 08, 2021

Cash or credit: Exploring the pain of paying

Studies suggest the farther you are away from "real" money, the easier it is to spend it.

When you pay cash, you can "feel" the money leaving your control. This isn’t true with credit cards. Flipping a credit card up on a counter registers nothing emotionally.

Chalk it up to a concept called the pain of paying, says Dan Ariely, the author of Predictably Irrational: Imagine that a restaurant, rather than charge $30 per meal, charges by the bite, with a waiter standing tableside ringing up each morsel. That reminder would make for an extremely unpleasant meal.

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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...