A study has revealed that shoppers who are feeling low and down on themselves are more likely to buy ego boosting expensive purchases on their credit cards.
With people struggling for confidence following a knock at work or home, one method of cheering themselves up is to buy luxury goods, usually only affordable by people they view as successful, in an attempt to make themselves feel better.
While these purchases may make shoppers feel better, invariably they can’t actually afford them and end up buying things on credit, or using a credit card.
The research, conducted by Niro Sivanathan from the London Business School, and Nathan Pettit from Cornell University, focused on the psychology of the pain of parting with cash, and if using a credit card was easier.
The research was carried on through a computer test and found that 88% of those asked said they were likely to make an ego boosting purchase with their credit card just after their confidence had been knocked.
They then took 150 students and got them to take a computer test, telling half of them to think about buying a luxury high end jean, and the others to think about normal every day jeans.
After the test they were told they had done poorly, a self esteem knock that saw those surveyed willing to pay just under 30% more for a pair of the luxury jeans, and 60% were willing to purchase them with a credit card.