The Impact of Credit Cards on Spending: A Field Experiment

  title={The Impact of Credit Cards on Spending: A Field Experiment},
  author={Elif Incekara-Hafalir and George Loewenstein},
  journal={Behavioral \& Experimental Finance eJournal},
In a field experiment, we measure the impact of payment with credit card as compared with cash on insurance company employees' spending on lunch in a cafeteria. We exogenously changed some diners' payment medium from cash to a credit card by giving them an incentive to pay with a credit card. Surprisingly, we find that credit cards do not increase spending. However, the use of credit cards has a differential impact on spending for revolvers and convenience users: Revolvers spend less when… 

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