Credit cards and willingness to pay (Prelec & Simester, 2001)

Research question: How does credit-card payment context relate to willingness to pay in experimental settings?
Who conducted it: Drazen Prelec; Duncan Simester
Publication: Marketing Letters (2001)
Sample / design: See original publication for sample details by study · Experimental studies reported in Marketing Letters (2001)

What researchers found

The paper is widely cited for evidence that credit-card contexts can increase willingness to pay relative to cash contexts in experimental tasks.
Results are discussed in consumer behavior literature under payment-method effects / pain of paying themes.

What was not established

That every consumer always spends more with every credit card in real markets.
That credit cards uniquely cause household financial distress.

Limitations

Experimental settings may differ from everyday shopping.
Effects can vary by population, product, and design.
Full methodological detail requires the original paper.

Why it may matter

Helps explain why card spending can feel less vivid than cash—and why intentional friction can help some households.

Practical steps

Add a waiting period for non-essential card purchases.
Review card statements weekly for surprise categories.
Use cash/debit for categories that tend to overrun.

Original source: https://link.springer.com/article/10.1023/A:1011338802011

Last reviewed 2026-07-25

Research summaries are educational. They are not endorsements of every finding and are not individualized advice. Consult the original publication for complete methods and results.