Center for Behavioral Decision Research

CBDR : Seminar Series : Seminar by Elif Incekara Hafalir

The Impact of Credit Cards on Spending: A Field Experiment

	presented by Elif Incekara Hafalir (CMU (Tepper))


	Thursday, October 15	link to paper
	12pm
	PH 223D	link to Speaker's Site

	Abstract:

	In a field experiment, we measure the impact of payment with credit card as compared with cash on insurance company employees’ spending on lunch in a cafeteria. We exogenously changed some diners' payment medium from cash to a credit card by giving them an incentive to pay with a credit card. Surprisingly, we find that credit cards do not increase spending. However, the use of credit cards has a differential impact on spending for revolvers (who carry debt) and convenience users (who do not): Revolvers spend less when induced to spend with a credit card, whereas convenience users display the opposite pattern.

	Host at CMU: Morewedge