University Honors

Past research suggests that spending cash is more psychologically painful than using other payment methods because cash is tangible and more salient (Prelec & Loewenstein, 1998). However, with shifts in how cash is viewed and used due to increased digital payments and online shopping, it is unclear whether these prior findings hold true, especially among younger consumers. The purpose of this study is to examine whether the psychological pain of paying differs by payment method (cash, credit, debit) and purchase type (splurge, hedonic, utilitarian), and whether these effects differ from past research. This study measured the pain of paying among UCR undergrads (n = 832) using a 5-point Likert scale across the three purchase-type scenarios. We hypothesized that these younger consumers would experience less pain of paying when spending cash compared to using credit or debit, and more pain for splurges than hedonic and utilitarian. We found support for both hypotheses. For UCR undergrads, cash was indeed less painful than credit or debit. Utilitarian purchases were also less painful than hedonic or splurge purchases, but there was no interaction between purchase type and payment type. We also measured additional individual differences, such as employment status, bank apps frequency of use, and tightwad-spendthrift tendencies, but none significantly moderated the effect of payment type.