Credit card cue effect: How mere exposure to credit card cues promotes consumers’ perceived financial well-being and spending
International Journal of Bank Marketing
ISSN: 0265-2323
Article publication date: 5 August 2019
Issue publication date: 7 April 2020
Abstract
Purpose
The extant literature has mixed results regarding the credit card cue effect. Some showed that credit card cues stimulate spending, whereas others were unable to replicate the findings or found that cues discourage consumer spending. The purpose of this paper is to investigate how consumers’ sensitivity to the pain of payment affects their mental associations about credit cards and how the differences in credit card associations moderate the credit card cue effect on spending, providing a possible explanation for the mixed results in the literature. Furthermore, this paper examines the role of consumers’ perceived financial well-being, measured by their perceptions of current and future wealth and their sense of financial security, in mediating this moderation effect.
Design/methodology/approach
An experimental study was conducted with a sample of 337 participants to test the hypothesized model.
Findings
After being shown credit card cues, spendthrift participants had more spending-related thoughts and less debt-related thoughts, perceived themselves as having better financial well-being and consequently spent more than tightwad participants.
Originality/value
To the authors’ knowledge, this is the first study to investigate the direct link between an exposure to credit card cues and perceived financial well-being, and one of the few to show evidence of the moderating effect of consumers’ sensitivity to the pain of payment on spending when credit card cues are present. This study suggests that marketers may use credit card cues to promote consumer spending, whereas consumers, especially spendthrifts, should be aware of how credit card cues may inflate their perceived financial well-being and stimulate them to spend more.
Keywords
Acknowledgements
This paper is based on part of King Yin Wong’s doctoral dissertation completed at Cornell University. The authors would like to thank for the dissertation funding support provided by Nanyang Technological University and Cornell University.
Citation
Wong, K.Y. and Lynn, M. (2020), "Credit card cue effect: How mere exposure to credit card cues promotes consumers’ perceived financial well-being and spending", International Journal of Bank Marketing, Vol. 38 No. 2, pp. 368-383. https://doi.org/10.1108/IJBM-01-2019-0010
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited