The easy-money effect: credit card spending and hard-work reminders

This research paper aims to examine the proposed easy-money effect of credit cards, which stimulates consumers to overspend. This paper shows how such an easy-money effect can be weakened.

In Study 1, an implicit association test was conducted with a sample of 169 participants to test the proposed credit card easy-money effect. In Study 2, experimental data were collected online from 365 participants to test the effectiveness of a hard-work reminder in weakening credit cards’ easy-money effect on consumer spending.

The proposed credit card easy-money effect exists, with spendthrift (ST) participants associating money with hard work less in the implicit association test after being presented with a credit card cue versus neutral cue. The results from Study 2 show that ST participants spent more on their dinner than tightwad participants when shown a credit card cue. However, this effect could be weakened when STs were also reminded of their hard work by a picture accompanied with words.

This paper suggests that credit cards’ spending-stimulating effect is due to consumers’ associations between credit cards and easy money. Based on this notion, this paper suggests conditions in which credit cards will stimulate more and less spending.

This is the first research attempt to examine the credit cards’ easy-money effect and the effectiveness of reminding consumers of their hard work to mitigate credit cards’ long-established spending-stimulating effect.