Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
The Pain of Paying How Credit Cards Trick Your Brain
In this episode of Behavioral Economics with Fexingo, Lucas and Luna explore the 'pain of paying' — the psychological discomfort we feel when parting with money. They anchor on a landmark 1998 study by Prelec and Simester which found that people are willing to pay up to 100% more for the same item when using a credit card compared to cash. The discussion unpacks why credit cards decouple the pleasure of consumption from the pain of payment, making spending feel less costly. They also examine how modern frictionless payments — tap-to-pay, Apple Pay, and one-click checkout — reduce…
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