Credit Cards as Spending Facilitating Stimuli A Conditioning Interpretation
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Credit Cards as Spending Facilitating Stimuli
A Conditioning Interpretation
RICHARD A. FEINBERG'
Four experiments and one study were conducted to test the hypothesis that stimuli
associated with spending can ^icit spending responses. In all experiments, credit
card stimuii were either present or absent in situations in whit^ subjects were given
an opportunity to spend. Credit card stimuli directed spending such that the prob-
ability, speed, or magnitude of spending was mhmiced in the presence of credit
card cues. A conditiontng expianation was used to interpret the results.
T he "buy now, pay later" philosophy has affected
the American way of life. At their inception, credit
cards simply facilitated commerce; today they are a vital
(e.g., Borgen 1976; Hirschman and Goldstucker 1978;
Hirschman, Greenberg, and Robenson 1978).
Behavioral work has been primarily descriptive. Who
component of business, banking, and personal money is the credit card user—e.g., age, education, or socio-
management (e.g., Clark 1975; Savage 1970). The im- economic status (Plummer 1971; Slocum and Mathews
ponance of responsible and irresponsible use of credit 1970)? How is the user different from the nonuser (Ma-
cards necessitates a thorough understanding of how in- ledon and Rucks 1974; Martell and Fitts 1981)? How
dividuals come to use or abuse them. However, con- do users of different types of credit cards (retail vs. bank)
sumer behavior research has traditionally centered on differ (Goldstucker and Hirschman 1977; Hirschman
understanding the antecedents of purchase; the effects 1979; Hirschman and Goldstucker 1978; Hirschman et
ofthe mode of transaction (e.g., cash, check, or credit al. 1978)? How do attitudes relate to credit card use
card) have not been extensively explored. Because al- (Awh and Waters 1974; Mandell 1972)? How can we
temative systems of payment differ in Imponant eco- identify good/bad credit risks (Fletcher and Wood 1974;
nomic and social characteristics, the type of payment Grablowsky 1975)? How does credit use var>'by product
may exen a significant influence on individual con- type (Mathews and Slocum 1968)? How does credit card
sumer behavior (Hirschman 1979). use reflect changes in public policy—e.g., awareness of
consumer credit legislation such as the Truth in Lending
Law (Cunningham and Cunningham 1976; Day and
INTRODUCTION Brandt 1974; Penner 1977: Shay and Schober 1973)?
Summary of Credit Card Research
Research on credit cards has mainly centered on the Credit Cards and Facilitated Spending
development of user profiles and exploration of broad
economic issues. Economic work has been directed to- The apparent enhancement of spending with credit
ward predicting consumer demand and use via a num- cards is the characteristic of primary concern in this
ber of economic parameters such as finance charge and research. Retailers (Borgen 1976; Huck 1976), credit
consumption (Batra 1975; Garcia 1980; Haberler 1942; researchers (Hirschman 1979), and popular writers
McAlister and DeSpain 1975; Russell 1975). Funher (Galanoy 1980; Merchants of Debt 1977) generally
work has attempted to assess the effects of credit card agree that credit cards facilitate spending. Indeed there
use on the money supply (Mandell 1972), banking is a range of correlational and survey data supporting
(Mandell and Murphy 1976; Russell 1975), and retailing this view. Yet there is no special aspect of the credit
card that is implicated as the causal factor in facilitating
spending (Federal Reserve System 1968; Zipprodt
1969).
'Richard A Feinberg is Associate Professor of Consumer Sciences
and Retailing, Purdue University. West Lafayette. IN 47907. Portions Behavioral studies that show the facilitative effects
of Experiments 1, 3, 4, and 5 were presented at the annual meeting of credit cards are descriptive or correlational. Con-
ofthe American Psychological Association in 1982 and 1984 and the sumers report that they spend more with credit cards
American Council of Consumer Interests In 1983. The research was (Burman 1974; Mathews and Slocum 1968). Credit card
supponed in part by grant #82037 from the Agriculiural Experimental
Staiion, Purdue University. possession and use is positively correlated with the an-
ticipation and actualization of funher use (Hirschman
348
C JCHJRNAl OF CONSUMER RESEARCH • Vol. 13 • December 1986CREDIT CARDS 349
1979; Wise, Brown, and Cox 1977). Explanations of card cues. Thus while people may spend with credit
this relationship are generally economic and rational. cards because of the ease of transaction, credit card
Credit cards are seen as a convenient and relatively stimuli may acquire the ability to elicit spending be-
painless way of spending (Hirschman 1979), and debt havior.
has become more socially acceptable (Eastwood 1975). The present studies were designed to test the latter
Moreover, the use of credit cards lowers the perceived hypothesis. At one level this research attempts to dem-
cost and begets further use (White 1980). Finally, it onstrate that situational stimuli can influence consumer
may be that consumers need the credit to make partic- behavior. At a second level the research attempts to
ular purchases, or consumers who are price sensitive understand the atitecedents and consequences of credit
may recognize the potential dollar savings involved in card use as a mode of payment.
credit card use (Ingene and Levy 1982). However, the
correlational and self-report nature of these studies and
explanations precludes determination of whether it is STUDY 1
the credit card that causes spending or whether, for ex-
ample, high spenders gravitate toward credit card usage. In Study 1, tips left by cash and credit card customers
The cause and effect relationship between credit cards were observed in a restaurant. It was predicted that for
and spending has yet to be adequately explored. equivalent check amounts, credit card tips would be
greater than cash tips. Credit card stimuli, present while
a credit card customer is paying the check, will increase
Credit Cards as Spending the size of the tip.
Facilitating Stimuli
The present research is predicated on the assumption
Procedure
that some purchase situations are cotitrolled by the With the cooperation ofa local restaurant, 135 cus-
stimulus properties of that situation rather than solely tomers were observed at random intervals over a period
by the instrumental ends that might be served by the of one week. Party size, check amount, mode of pay-
purchase (e.g., receipt of goods or services). Specifically, ment, and amount of tip were recorded by the waiters
through experience and use, credit cards may acquire and waitresses. A random sample of credit card receipts
the ability to elicit spending behavior. indicated 100 percent accuracy in recording the check
In light of the prediction that some purchases may size and tip.
be under the stimulus control ofthe spending situation,
the research by Berkowitz and his colleagues (Berkowitz
1971, 1974; Berkowitz and LePage J967) on the stim- Results and Discussion
ulus control of aggression is particularly interesting.
They have demonstrated that the presence of aggression The tip was the dependent measure of interest. A 2
reiated stimuli can enhance aggressive responding. In (payment by cash or charge card) X 4 (amount of check
Berkowitz and LePage (1967), subjects with minimal divided into quartiles) analysis of variance indicated
experience with weapons were put into a situation in that when credit card stimuli were present subjects left
which a^ression was called for while the presence or a significantly higher tip, F(l,127) = 4.48, p = 0.03.
absence of weapons was varied. The major finding was Quartiles were used as a convenience. The following
that the presence of weapons triggered aggressive re- tabulation displays the median check size in parentheses
sponses (the "weapons effect"). Both the conceptual and beiow each quartiie. Analyses based on median and
methodological form of Berkowitz and LePage 1967 triadic splits yielded equivalent results. The tabulation
can be viewed as the model for the present studies. Just indicates that at each level of check size individuals
as cues related to aggression triggered aggression, in this paying with credit cards left a larger tip. (The tip as an
study cues related to spending (credit card stimuli) are average percentage ofthe check is in parentheses under
seen as being able to trigger greater spending. the dollar amount.) Overall, the tip averaged 16.95 per-
In these studies it is hypothesized that credit card cent ofthe check when left with a credit card and only
stimuli, as unique and distinctive cues in the spending 14.95 percent when left in cash.
sequence (e.g., credit cards are used for little else but
spending), direct spending responses. Thus in spending Check size (in quaniles)
situations, the instrumental act of spending may be en- 1 2 3 4
hanced or facilitated by credit card cues that elicit sup- ($17.00) ($23.00) ($31.00) ($47.00)
plementary spending reactions. As a result, it is hy-
pothesized that the magnitude ofthe spending response Credit $3.03 $3.92 $4.91 $8.04
will be affected by the presence or absence of credit card card (17.8%) (15.8%) (17.1%)
cues. Individuals will be more likely to spend, spend Cash $2.36 $3 60 $4.64 $7.23
more, or spend more quickly in the presence of credit (13.9%) (15.6%) (14.9%) (15.4%)350 THE JOURNAL OF CONSUMER RESEARCH
Thus credit card stimuli enhanced the magnitude of absent condition the looseleaf book was on an empty
spending in an applied setting. Unfortunately the cor- table. Subjects were instructed to open the "Consumer
relational nature of this design makes it impossible to Products" book, proceed at their own pace, and answer
determine whether the credit cards facilitate the tipping the corresponding questions about the products on the
or greater tipping results from other social processes. answer sheet.
One can reasonably postulate that some of the credit Subjects were asked two questions. First, in a space
card users were on expense accounts, thus making gen- provided, they were asked to indicate the amount of
erosity more likely. Experiments 1 through 4 attempt money they would be willing to spend for that item;
to better define the cause and effect nature ofthe rela- this was the dependent variable. Second, to mask the
tionship between credit cards and spending. nature ofthe research, they were asked to write out the
most distinctive aspect(s) ofthe product one-fourth of
the way down the page under the first question.
EXPERIMENT 1
The first experiment was designed simply to test the Results
hypothesis that the presence of credit card stimuli will A 2 (male-female) X 2 (credit card present vs. absent)
facilitate spending—increase the amount an individual X 7 (the seven different products) ANOVA on the
spends. Experiment I also assessed whether the credit amount spent was completed. There was a statistically
card effect was in any way bounded by the sex of sub- significant main effect for credit card present vs. absent,
jects, the type of product used as the dependent mea- f(l,58) = 17.97, p < O.OI, When credit card stimuli
sure, or their interaction. were present, subjects consistently said they would
spend more per product. This was true for each of the
Method seven consumer products as shown in the next tabu-
lation.
Subjects. The subjects were 60 undergraduates (30
male and 30 female) who participated for extra course Credit card Credit card
credit. Subjects were run in individual testing sessions. Products present absent
Male and female subjects were randomly assigned
(controlling for gender) to one of two experimental Dress $ 41.50 $ 27.77
Dress $ 33.91 $ 21.09
conditions—credit card stimuli present or absent. $ 69.95
Tent $ 77.73
Procedure. The experiment was presented as a study Man's sweater $ 20.64 $ 13.91
concerning attitudes towards consumer products. Sub- Lamp $ 40.41 S 28.36
jects were told that they would be looking at pictures Electric typewriter $165.36 $131.45
of various products and would be asked for information Chess set $ 43.14 $ 35.29
on those products. Subjects were led to a bare experi- Tukey's individual comparisons showed all product
mental room in which there was a looseleaf book on a comparisons to be significant {p's, < 0.05). There was
table. This book was labeled "Consumer Products" and also a significant main effect for item, /'(6,294) = 96 75,
contained pictures of seven consumer items selected p < 0.001, indicating that the items differed in estimated
from various mail order catalogues. The pictures of price; e.g., average cost for the dress was $34.63, the
these products were pasted in the center of plain white tent was $70.34, and the typewriter was $ 148.41. There
paper in clear plastic. The products were clearly labeled was no significant main effect for sex, and there were
on the top of each page with an identifying number no significant interactions (F's < 1).
(e.g.. Product 1, Product 2, etc.). The order ofthe prod-
ucts in the book was determined randomly and pre-
sented to subjects in one of four random orders to con- Discussion
trol for any unintended order effects. The products In a simulated buying task, individuals confronted
consisted of two dresses, a man's sweater, a tent, a lamp, with credit card stimuli estimated they would spend
a chess set, and an electric typewriter. more than did individuals who were not in the presence
For half of the subjects, credit card stimuli were pres- of such stimuli. This effect appears to be independent
ent on the upper left hand corner ofthe table near the of the sex of the subject and the type of item under
book. These subjects were informed that the credit card consideration.
paraphernalia belonged to another experiment. Since The similarity in the conception, methodology, and
this experiment, research in my lab has shown that the results of Berkowitz's studies and the present studies
presence or absence ofthis admonishment has no effect suggests that some ofthe issues that surround the va-
on results. A pilot survey showed MasterCard to be the lidity of Berkowitz's work need to be addressed here.
most popular and widely recognized charge card for the First, it should be pointed out that the results, meth-
subject population. The stimuli were MasterCard in- odology, and interpretations ofthe aggression eliciting
signias used on retail store doors and regular and large properties of aggression related stimuli studies are still
size replicas of actual MasterCards. In the credit card controversial 15 years after the original work. AlthoughCREDIT CARDS 351
the "weapons effect" has been replicated and extended demand characteristics of their own: "I'm not supposed
(e.g., Fraczek and Macauley 1971; Schuck and Pisor to say that I'm suspicious about credit cards/'
1974; Turner and Simons 1974), several studies have Third, the empirical model presented here assumes
failed to replicate Berkowitz's findings (e.g. Buss, that the stimulus properties of credit card cues develop
Booker, and Buss 1972; Page and Scheidt 1971). As the ability to elicit spending responses in spending sit-
Berkowitz (1974) argues, guns "clearly do not always uations in part by their association with spending and
stimulate increased aggression" (p. 167). In the same their distinctiveness in spending situations. The use of
sense, credit cards will not always stimulate spending. college students as subjects may be seen as a problem
The goal of future research should be the discovery of because of their relative lack of familiarity with credit
the boundary conditions for this phenomenon. cards. It is assumed here that by the time we are in
Second, the major criticism regarding the Berkowitz college we have developed a positive association be-
work, and therefore this study, focuses on demand tween credit cards and spending from viewing the very
characteristics (e.g., Berkowitz 1974). That is, the fa- positive credit card television commercials or actually
cilitation effect may be due to demand characteristics seeing others spend with credit cards. Indeed, a prelim-
inherent in the experimental situation. Subjects may inary study showed "spending" to be the most common
come into the laboratory, see the credit card stimuli on associate to credit card stimuli in a population of similar
the table, and conclude that "this experimenter wants "naive" credit card users. In that study 125 undergrad-
me to spend." However, there is very little evidence uates were surveyed to determine the most frequent as-
from discussion and empirical examination ofthe con- sociate of credit cards. One hundred and nine (87 per-
ceptually similar studies (e.g., the "weapons effect" of cent) indicated spending (to spend, to buy, etc.) to be
Berkowitz and LePage 1967) that subjects are motivated the most common associate. This is consistent with a
to confirm the experimenters' hypothesis, even if similar study conducted by Richards (1975) and sup-
known. In a series of studies designed to assess the de- ports the assumption that credit cards are distinctively
mand characteristics explanation of the "weapons ef- associated with the instrumental act of spending.
fect," Berkowitz (1971) found no evidence that subjects Moreover, the use of college students as subjects may
were aware of the hypotheses or that demand charac- have minimized the strong associative histories that
teristics were responsible for his findings. Further, in would obscure or confound the effects of credit card
the present experiment extensive debriefing did not un- stimuli. Thus the use of relatively naive subjects leaves
cover any suspicion regarding the credit card stimuli. the effect of credit card cues relatively unambiguous. It
Subjects were asked: should be noted that one could possibly use the indi-
vidual's positive or negative credit histories to predict
the associative value and consequence (facilitative or
1. What do you think the experiment was about? Nine- inhibitive) of credit card cues.
teen subjects (eight in the credit card condition) either
wrote "did not know" or left it blank. Everyone else Putting aside, for the moment, questions of demand
reported the experiment to be about attitudes and/or characteristics (it is difficult to prove a negative result),
estimated price of products. No individual mentioned
credit or credit cards. thefindingssuggest that the presence of credit card cues
facilitates spending. Since this empirical generalization
2. What do you think my hypothesis was (i.e.. What did is only a statement of probability, further research will
you think 1 was trying to studyJ?TheTt was txo mention strengthen (or weaken) the likelihood of this relation-
of credit or credit cards in either group. Most re- ship. Experiments 2 to 5 were designed to replicate and
sponses centered on estimating prices and attitudes extend the "credit card effect."
toward products.
3. During ihe experiment, and before this questionnaire
wasgiven. what suspicions did you have. ifany?Only EXPERIMENT 2
five individuals in the no credit card condition and
three individuals in the credit card condition reported If credit card cues produce supplementary spending
any suspicion (none of which mentioned credit cards). reactions, individuals may not only spend more (Ex-
4. Did you ever suspect thai the credit cards on the desk periment 1), but be more likely to spend (increased mo-
had something to do with the experiment? (Given only tivation to spend) as well as spend more quickly (re-
to the credit card condition.) Twenty-nine of the 30 duced decision time).
individuals answered "no" (one person left it blank). Research has shown decision time to be a reliable
5. If yes. how suspicious were you? Only two individuals and valid indicator of strength of preference (Aaker,
marked the 10-point Likert type scale from 1 (quite Bagozzi, Carman, and MacLachlan 1980), with shorter
suspicious) to 10 (not suspicious). reaction time representing greater product preference.
Experiment 2 was designed to serve as a replication of
Although there is little evidence from these questions the basic phenomenon demonstrated in Experiment 1,
that the results may be due to demand characteristics, and to further test predictions concerning increased
it should be pointed out that the adequacy ofthe ques- motivation and decreased decision time for spending.
tions themselves can be questioned as being subject to As in the previous study, subjects were asked to estimate352 THE JOURNAL OF CONSUMER RESEARCH
the price they would be willing to pay for speciRc items TABLE 1
and to indicate their willingness to charge specific items. MEAN PRICE FOR PRODUCTS IN THE PRESENCE OR
ABSENCE OF CREDIT CARD STIMULI
Method
Credit Credit
Subjects. The subjects were 24 female undergrad- cards cards
uates randomly assigned to one of two experimental Product absent present
conditions—credit card stimuli present or absent. Sub- Toaster $ 21.50 $ 67.33
jects volunteered to receive extra course credit. Female Black & white T.V, $ 67.00 $136.92
subjects were used because male subjects were not Lamp $ 34.42 $ 47.17
available. Since other pilot work and Experiment 1 Digital dock $ 18.08 $ 31.25
cojisistently showed that sex is neither a statistically Pocket cama-a $ 29.58 $ 52.67
Home stereo system $157.42 $191.17
significant main or interacting variable, the use of fe- Dress $ 25.42 $ 49.42
male subjects was not considered to be a limitation. Mixer $ 17.75 $ 36.25
Tent $ 7.58 $ 28.42
Procedure. Subjects, run individually, were led to a Saw $ 33.42 $ 67.33
Chess set $ 8.67 $ 25.75
desk in an experimental room in which a rear projected Cassene tape recorder $ 26.50 $ 42-75
slide screen was mounted on a table in front of them.
In addition, a button labeled "Response" was attached ''pCREDIT CARDS 353
TABLE 2 Procedure. The experiment was presented as dealing
MEAN DECISION TIME FOR PRODUCTS IN THE PRESENCE OR
with "impression formation." Subjects were given a
ABSENCE OF CREDIT CARD STIMULI short description ofa person and were asked to form
impressions on the basis ofthe information. To set the
Credit Credit stage for the charity solicitation, a faculty office was
cards cards used rather than the regular experimental rooms (no
Product absent present F(1.22} faculty member was present). Subjects sat at a table
that contained stacks of file folders and reprints on the
(seconds) (seconds)
rear ofthe table against the wall. In the credit card con-
Toaster 21.41 11.46 5.37' dition, the same credit card stimuli used in the previous
Black & white T.V. 23.94 13.11 5.02' studies were placed in the upper left hand corner ofthe
Lamp 20.51 9.33 12.29' table. Ten minutes after arriving for the experiment, a
Digital dock 20.77 11.90 4.78'
Pocket camera 18.99 9.49 6.39'
stranger (an experimental confederate) knocked on the
Home stereo system 23.96 11.35 11.88' door, approached the subject, and indicated that the
Dress 21.01 11.77 3.96'* "United Way" was conducting a door-to-door survey
Mixer 15.46 7.95 3.93^ concerning the practicality of collecting on campus.
Tent 14.90 8.60 4.05'' Subjects were asked to indicate how much they would
Saw 20.61 8.36 9.77'
Chess set 14.21 12.53 .29
be willing to donate if so approached. The experimental
Cassette tape recorder 15.04 14.62 .009 confederate exited and the subject completed the
masking task.
•p354 THE JOURNAL OF CONSUMER RESEARCH
card stimuli being varied. In Experiment 4 subjects were tal lask, were found to facilitate the magnitude of es-
asked to make an actual donation to a charity with the timated and actual spending.
presence of credit card stimuli varied. The experimental
procedure was identical to that of Experiment 3 except GENERAL DISCUSSION
subjects were asked to make an actual donation.
These experiments capitalized on major implications
ofthe simple observation that people appear to spend
Method more with credit cards. The present studies were based
Subjects. The subjects were 30 undergraduates run on the assumption that because credit card stimuli are
in individual testing sessions and randomly assigned to so closely associated with spending, they may activate
one of two experimental conditions—credit card stimuli a sequence of behaviors that increases the motivation
present or absent. to spend, the amount spent, and the probability of
Procedure. Subjects were told that they were partic- spending, and decreases the decision time to spend.
ipating in an experiment of "impression formation." Study 1 explored an applied test. If credit card stimuli
Ten minutes into reading short descriptions of various affect spending responses, then evidence of that rela-
individuals and answering various questions, a stranger tionship should be evident in "real life" spending sit-
(an experimental confederate) entered, approached the uations. The finding that tipping was greater for equiv-
subject, and indicated that the "United Way" was col- alent check amounts when paid by credit card is sup-
lecting door-to-door across campus. Subjects were asked portive of the proposed analysis. The findings in
to make a donation to the charity. Decision time was Experiments 1 and 2 that the presence of credit card
measured from the time the collector asked for a do- stimuli enhances estimated spending and decreases de-
nation to the moment the subject indicated they would cision time (Experiment 2) substantiate the cause and
or would not contribute. Following the donation the effect relationship between credit cards and spending
confederate exited and the subject completed the only implied by Study I, Experiments 3 and 4 provide
masking task. The credit card stimuli consisted of further support in two ways. First, the demonstration
MasterCard insignia and regular and large size replicas that the presence of credit card stimuli can facilitate a
of actual MasterCards. The siimuli were placed in the spending response differing from that used as a depen-
upper right hand corner ofthe subject's table. Permis- dent measure in Experiments 1 and 2 serves as a strong
sion to use the "United Way" name was obtained from conceptual and situational replication ofthe findings
the local United Way director, and actual money col- of those experiments. The findings of Experiment 4 are
lected was contributed. particularly important because probability, magnitude,
and decision time were facilitated in a situation that
combined a high degree of mundane and experiential
Results and Discussion realism without sacrificing experimental control over
The amount of money donated by subjects was the variables. Individuals were more likely to give money,
dependent variable. Consistent with the results ofthe give a greater amount, in a shorter period of time, in a
previous studies in which spending was simulated, sub- situation in which the causal relationship between credit
jects in this experiment actually contributed signifi- card stimuli and spending was not diluted.
cantly more in the presence of credit card stimuli, The experiments here indicate that credit card stimuli
F(1.28) = 12.9, p < 0.01. Ofthe 15 subjects in each can enhance the magnitude, probability, and decision
group, 13 contributed in the presence of credit card time involved in spending. If an individual uses a credit
stimuli, (average donation $.36) while only five con- card for a purchase or overspends with credit cards, we
tributed when credit card stimuli were not present (av- tend to assume that they wanted to do so or that they
erage donation $.11). Thus, as predicted, and consistent did it accidentally. The findings of these studies suggest
with Experiment 3, which showed estimated donation another possibility: the presence of credit card cues may
10 a charity to be facilitated by the presence of credit elicit spending responses. It might be that credit card
card stimuli, actual donation to a charity was increased use or abuse stems from the operation of credit card
in the presence of credit card stimuli. Further, and sim- cues. More insidiously, the operation of credit card cues
ilar to results in Experiment 2, credit card stimuli sig- might be undetected in facilitated spending without
nificantly decreased decision time for those who con- credit cards and in impulsive spending.
tributed, F(l,i6) = 5.89, p < 0.05. Average time for
decision to contribute was 6.72 seconds when credit
card stimuli were present and 12.04 seconds in the ab-
sence of such stimuli. Conditioning as a Theoretical Mechanism
The simplicity ofthe previous four studies (the only How are we to understand the relationship between
variable that differed between experimental and control credit card stimuii and spending behavior? Although
conditions was the presence or absence of credit card much of consumer behavior may be purposive and goal
stimuli) shows that the presence of credit card stimuii directed, there may weJ] be instances in which consum-
enhances the magnitude of spending. Credit card stim- ers respond relatively automatically to stimuli imposing
uli, having no instrumental purpose for the experimen- on them.CREDIT CARDS 355
As people spend with credit cards, a form of condi- REFERENCES
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Bank Public Relations and Marketing Association.You can also read
