You’re probably familiar with Dave Ramsey, the personal finance expert who’s on the radio and has sold millions of best-selling finance books.  I remember watching one of his videos a few years ago when my wife and I took his Financial Peace class and he mentioned that people are likely to spend more money when they use a credit card, than when they pay with cash.  Could it be possible that people use a credit card to avoid pain? You see, every time we spend money, most people’s brains register some sort of pain.

credit-cards-painWhen we use cash, it’s tangible.  We feel it slip through our fingers and we emotionally recognize that that transaction cost us something.  When we use a debit card, we tend to spend a little more money because our brains don’t register the same level of pain simply because of the digital disconnect between the plastic card and the bank account that that money is being withdrawn from.  Now, put that same transaction on a credit card and it’s even less painful.  Now, you’ve not only eliminated the pain caused by paying with cash, you’ve been able to split that pain up into smaller bite-sized payments that are put off until sometime in the future.

When you’re setting up your payment options for your customers, do you give them options that allow them to eliminate pain?  Do you allow them to pay in smaller chunks over several months?  Or how about deferring the payments for 6 months?  All of these things can make purchases much less painful and help you to close the sale.

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