A study by the University of Maryland’s Robert H. Smith School of Business found that the “denomination effect” is indeed real. It turns out that carrying larger bills mitigates overpaying. So be sure you ask for a hundee instead of five $20’s.
This research will be published in an upcoming issue of the Journal of Consumer Research. This follows prior research finding that consumers spend more when using credit cards instead of cash.
Did you see this story in the Wall Street Journal? American Express is paying select customers to close their accounts. This is how bleak the economic environment has gotten. $300 to not be a customer. Crazy. Maybe Toll Brothers can pay us $6,000 to not buy a home.
Keep in mind that accepting this offer may hurt your credit score, which will decrease your likelihood of obtaining another card in the future. As such, be certain that you have alternative credit cards on hand, before agreeing to the deal.
Also, you will lose any membership rewards points accumulated. So be sure to claim your rewards before agreeing to the offer.
It will be interesting to see if other card issuers follow suit with similar offers.
Discover has introduced the “Spend Analyzer” tool to provide charts that organize purchases into categories such as travel, supermarkets, and gas.
The financial tool allows cardholders to compare spending behavior over time, track and sort spending by category, merchant or monthly spend and display up to 24 months of account activity.
View a demo of the product at www.discover.com/spendanalyzer/