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Turns out there is some truth about people engaging in "retail therapy" to perk themselves up after a bad day. Researchers at Cornell University and the London School of Business conducted a study that shows people splurge to cheer themselves up, and are more likely to use credit cards to finance this behavior.
The study's authors created an experiment in which people were instructed to take a test on a computer, then told they either scored well or poorly. Those who believed they performed badly on the test were more likely to spend a greater amount on a hypothetical purchase and more likely to use a credit card to do so.
The scientists wrote in their paper summarizing their findings, "Since paying with credit is less psychologically painful than paying with cash, we predicted that when participants were not provided the opportunity to self-affirm, those receiving threatening negative feedback -- and therefore seeking to avoid further compromising their already damaged self-worth -- would show a greater willingness to purchase with credit than those receiving nonthreatening feedback."
In addition, the scientists discovered a related behavior: People who believed themselves to be poor test-takers also displayed a greater willingness to buy luxury items.
What the researchers identified is the start of a potentially dangerous feedback loop in which people turn to high-end items bought on credit to repair a bruised ego. If people feel bad about themselves, they're more likely to seek out a credit card-funded indulgence, but that splurge may in turn make them ashamed of their spending habits, which will only bring them back to the credit cards for another self-esteem boost.
Everyone has bad days, but the antidote doesn't have to be in the form of a credit card purchase. Armed with the knowledge that you're more vulnerable to the suggestive power of plastic when you're down in the dumps, take a breather and avoid fiscally risky behavior. The study's authors identify self-affirmation as a way to correct the emotional turmoil that makes us crave a shopping spree.
"Reflecting on a personally important value allows the opportunity to repair general feelings of self-worth," it said. So turn to a friend for a pep talk, play with a pet or reflect on past personal or professional accomplishments.
