Cash purchases hurt more than card payments – But young people can think of cash as “free money”

In consumption it’s christmas a big spike at the time. A glance at the bank account balance can be overwhelming, especially if the budget for spending Christmas is overrun.

When you pay for purchases with a payment card or mobile payment, the spending of money at the time of purchase is not as tangible as when using physical cash, and the total amount accumulated from purchases may surprise you afterwards.

When paying in cash, money will be spent less as on a card, numerous studies tell.

“Electronic payments hurt less than cash payments”, are writing In a study published this year in the Journal of Economic Behavior & Organization, researchers from the University of Groningen and the Dutch Central Bank.

Monet researchers consider the use of cash to be the most useful payment method in preventing overspending and indebtedness.

“Contact payments, on the other hand, are the least useful”, Dutch researchers Marie-Claire Broekhoff and Carin van der Cruijsen are reporting.

The results are based on the responses of approximately 2,500 consumers.

Ease therefore promotes more reckless spending of money.

The matter has been received display also in brain scans. Cash payments activate brain areas related to physical pain more strongly than card or mobile payments.

Different however, older people experience payment methods in different ways.

Although electronic payment methods generally hurt less than electronic and especially contactless payments, this does not apply to teenagers, the Dutch researchers found.

“The picture emerging among teenagers is completely different: traditional debit card payments hurt more than cash payments,” they write.

The two estimate that experiences and habits affect which payment method hurts.

“The younger generation is closely connected to their smartphones and uses banking applications on a large scale. As a result, they may be more aware of electronic payments and less aware of cash payments.”

Parallel a doctoral researcher at the Swedish Lund University has findings On Carin Rehncrona.

He analyzed as part his dissertation entries that the 20–26-year-old subjects made about their own money use.

Many did not feel that cash payments had an impact on their total funds, as cash payments do not appear in account transactions and the phone does not send a notification about it like a mobile payment, Rehncro write on the researchers’ website The Conversation.

This is how one participant described it:

“I’m so bad at keeping track of cash, it’s like free money to me because it doesn’t show up in the bank account.”

Another said:

“I rarely use cash, only if I receive it as a gift. Then I try to get rid of it as soon as possible.”

Cash may therefore not restrain the use of money.

Published last summer Kontitutkimus indicates that the impact of cashless payments on purchasing behavior has weakened over the years.

In cash usage is decreasing both in the Nordic countries and in other parts of the world.

In Sweden, development is exceptionally advanced. Fewer and fewer shops accept cash, and 40 percent of respondents do not accept payment service company Netsin in the Nordic payment report used cash at all.

In Finland, the corresponding figure was 11 percent.

Most grocery purchases are paid with a traditional bank card. More than four fifths of card payments are contactless payments.