People don’t like to spend money. We experience pain of paying, because we are loss averse. This pain is thought to be reduced in credit card purchases, because plastic is less tangible than cash, the depletion of resources (money) is less visible and payment is deferred. Different types of people experience different levels of pain of paying, which can affect spending decisions. Tightwads experience more of this pain than spendthrifts, for example, which leads to different outcomes for these groups when payments are made by cash versus card (Rick, Cryder & Loewenstein, 2008; Thomas, Desai & Seenivasan, 2011). (See also mental accounting).
Rick, S. I., Cryder, C. E& ., Loewenstein, G. (2008). Tightwads and spendthrifts. Journal of Consumer Research, 34, 767-782.
Thomas, M., Desai, K. K, & Seenivasan, S. (2011). How credit card payments increase unhealthy food purchases: Visceral regulation of vices. Journal of Consumer Research, 38, 505-524.