Credit Cards Make You Fat

I know, I know, I am willing to say anything in my blog title to get you to read my post (see here for an oldie but a goodie). In my recently read pile is How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices by Manoj Thomas, Kalpeseh Kaushik Desai, and Satheeshkumar Seenivasan, which points to an association between what types of foods consumers purchase and how they pay at check-out.  The authors' basic hypothesis is that paying in cash is painful, or at least more salient, than credit or debit cards, which they characterize as "less vivid and emotionally more inert modes of payment." They do several studies but the first one uses data from actual shopping behaviors of 1,000 households over six months. The authors find  that these households buy a higher proportion of food rated as impulsive or unhealthy when they use credit or debit cards to pay for the purchases. They stress that the mode of payment did not affect the number of virtue products (such as vegetables) purchased. Another nugget of knowledge about consumer behavior; will we start seeing weight loss programs advise members to carry cash?

Comments

[Alessandro Machi]

There was a particular point you made in your article that maybe needs to be flushed out more.

So consumers are treating their debit card like a credit card?

Maybe if the consumers didn't have money automatically transferred to their debit card, but instead they physically went into the bank and made the deposit, that would then carryover into their buying habits.

Might make an interesting future article to determine if its true that people are treating their debit card like a credit card.

My take on that is that it is IMPOSSIBLE to treat a debit card like a credit card because debit card money is much more limited than credit card money.

In my opinion only those who pay off their credit card debt every month could possibly treat a debit card as if it were a credit card.

[Moopheus]

Alessandro--It's not "impossible" to treat a debit card like a credit card; people clearly do it. Perhaps they are more aware of the limit of their bank account, but the fact that overdraft charges have become a political issue suggests that this is not the case. It may be that overspend is less with debit cards than with credit cards, but it would not surprise me in the least if it still happens.