Consumers Spend More Impulsively With Cards—and Don’t Mind

Consumers not only prefer to use cards when they spend, but they also tend to spend more money when they don’t have to pay with cash. What’s more, paying with cards has gained widespread acceptance across all age groups and regions, signifying a lasting shift in consumer behavior. In general, using cards makes people less conscious of their spending.More than half of consumers surveyed in recent Forbes Advisor research said they are more likely to make impulse purchases when using cards, compared to less than a quarter who feel similarly when paying with cash. This tendency extends to big-ticket purchases, though at a lesser scale. Some 22% of respondents expressed feeling less discomfort about spending a lot of money when using a card.Additionally, more than a quarter said that not handling physical cash makes it easier for them to spend money. Not surprisingly, it’s the highest earners who are least likely to check their bank balance before they pull out their card. Nearly a third of those earning $150,001 to $200,000 said they rarely check their balance before making a major purchase, in contrast to 12% of those earning less than $50,000. Only 10% of baby boomers reported checking their balance before spending.

Spending Is Psychologically Easier With Cards

Separate data from the University of Notre Dame resulted in similar findings. That research found that some consumers prefer paying with cash rather than credit to avoid having a record of purchases they may feel guilty about. “When consumers make a purchase that feels hard-to-justify (vs. easy-to-justify), they want to avoid recalling this purchase in the future,” the authors noted. Recent trends indicate a decline in impulse buying. A 2023 survey from shopping site SlickDeals found that people made about $150 worth of impulse purchases each month, totaling nearly $2,000 a year. This figure had decreased from the prior year, likely a result of post-COVID shopping habits moving from online back to brick-and-mortar retailers. In all, these studies reveal that payments not only become technically easier with cards, but also psychologically easier. These findings suggest that card payments facilitate impromptu purchases, and consumers are aware of this effect—and perfectly fine with it.