The following report is based on the video entitled "The Pain of Paying: The Psychology of Money" by Duke University. The speaker in the video explains the pain of paying often experienced by individuals when settling bills. According to the speaker, individuals experience more pain when paying in cash than when paying using a credit card (Duke University, 2013). The pain of paying increases when the feelings of individuals about spending are linked with consumption. Based on the video, it can be concluded that individuals are more careful about what they buy when using cash instead of paying through credit cards.
I agree with the speaker in the video. Paying in cash often feels more painful compared to when paying using credit cards. The pain further increases depending on the type of purchase being made. If a purchase hurts more, people often try to avoid making the purchase. For example, it is very painful to use a lot of cash to purchase a standard pair of shoes; paying in cash is more painful than swiping a credit card. For this reason, the pain of paying is used as a tool to limit spending. It acts as a tool to help them decide whether they can afford a purchase (Raghubir, 2008). Through this, consumers can use their resources more carefully and rationally by calculating all associated commodities' costs. Therefore, emotions play a significant role in consumers' behavior, making them make better decisions while spending.
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In summary, the purchasing behavior of individuals is based on the psychology of the pain of paying. Often individuals feel more pain when paying in cash compared to when paying using a credit card. Therefore, consumer preferences and "pain of paying" are significant determinants in choosing the payment mode.
References
Duke University-The Fuqua School of Business. (2013, February 1). The Paying of Paying: The Psychology of Money [Video]. YouTube. https://www.youtube.com/watch?v=PCujWv7Mc8o
Raghubir, P. (2008). Monopoly Money: The Effect of Payment Coupling and Form on. Journal of Experimental Psychology., 14 (3), 213–225. https://www.apa.org/pubs/journals/releases/xap143213.pdf
