Cash Or Credit – One Pays Emotional Dividends

Paper or plastic? Not your grocery bag but the way by which you paid for those groceries. In other words, do you choose to pay with cash or credit? The satisfying answer?

It’s not in your wallet but between your ears.  Your sense of financial satisfaction is a psychological manifestation that says Cash provides more satisfaction than C

redit. Allow me to explain.  Researchers have discovered that while credit cards may be convenient, paying with real cash can make you feel like you got more for your money.

University of Toronto researchers had two test groups purchase discontinued mugs: one group bought with plastic and another bought with cash. Then, the scientists attempted to buy back the scarce mugs, but had the participants name their own prices. On average, those who bought the mugs with cash wanted almost double what people who made the purchase with credit card did.

So what’s going on here? Study leaders says "Even if a check feels quite painful, Cash feels the most painful."

One takeaway--a cash-only policy might be a way to add positive emotion to transactions, potentially prompting repeat business. (Yahoo)