Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why You Feel Cash Differently Than Credit
In this episode of Behavioral Economics with Fexingo, Lucas and Luna explore the mental accounting bias known as the form-of-payment effect. They break down a 2020 study from the University of Pennsylvania showing that people spend up to 83% more when using credit cards versus cash for identical purchases. The hosts discuss why cash feels like a real loss while credit feels abstract, how this bias leads to overspending, and practical strategies to avoid the trap. They also examine how the rise of digital wallets and buy-now-pay-later services amplifies the effect, and what it means for…
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