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On average, people spent slightly more with cashless payment methods than with cash in a 2024 meta-analysis. The result was statistically significant but small, and it does not mean every card purchase causes overspending. The study combined many forms of cashless payment, so its conclusion cannot be reduced to credit cards alone or used to predict a specific dollar amount for one shopper.
What the 2024 review actually tested
Lachlan Schomburgk, Alex Belli and Arvid O. I. Hoffmann pooled evidence on the difference between cash and cashless payment methods in their article, “Less cash, more splash? A meta-analysis on the cashless effect,” published in the Journal of Retailing, volume 100, issue 3 (September 2024), pages 382–403. The publisher’s record and abstract are available at the article DOI.
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Instead of treating one experiment as a general rule, the authors synthesized results from studies conducted over more than four decades. Their dataset covered different purchase settings, populations and countries, allowing them to estimate an average “cashless effect”: whether spending was higher when a purchase was made without physical cash.
| Measure | Scope reported by the authors |
|---|---|
| Published papers | 71 |
| Effect sizes | 392 |
| Unique participants | 11,257 |
| Transactions | 338,513 |
| Countries represented | 17 |
| Publication | Journal of Retailing, volume 100, issue 3, 2024 |
The unit of analysis matters. “Cashless” is the umbrella category used in the review; it includes payment methods that do not involve handing over notes or coins. The evidence therefore addresses cash versus cashless payment in general. It does not isolate credit cards from debit cards, mobile payments, online checkout or any other particular instrument unless an individual study did so.
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The authors’ abstract states: “Across 392 effect sizes from 71 papers, we reveal a small, but significant, cashless effect.” That sentence describes the pooled result, not a promise that every shopper or every transaction will show the same pattern.
What “small but significant” means for a shopper
A statistically significant average indicates that the combined results were unlikely to reflect random sampling variation alone under the analysis used. “Small” describes the size of the average difference. The paper does not provide a universal percentage or dollar surcharge that can be applied to your next card purchase.
Three distinctions keep the finding in proportion:
- An average is not a personal forecast. Some people in the underlying studies spent more without cash, some showed little difference, and individual circumstances can move in either direction.
- Significance is not the same as magnitude. A reliable direction can coexist with a modest practical change.
- The comparison is between payment categories. It is not a test of whether one card network, rewards program, app interface or credit limit causes a particular outcome.
Because the review aggregates 392 effect sizes, it is more informative about a general tendency across settings than about the exact effect of a single checkout. Treat the conclusion as a risk signal: removing the physical act of counting cash may coincide with slightly higher spending on average, but the paper cannot calculate your personal increase.
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The meta-analysis examined conditions that changed the size of the average difference. These moderators are more useful than a blanket “cards are bad” rule because they show where payment method and purchase context intersect.
Conspicuous consumption: a stronger effect
The cashless effect was stronger for conspicuous consumption—purchases associated with displaying status, taste or success to other people. In those settings, a cashless method was linked to a larger average difference from cash than in less socially visible spending.
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This does not establish that a card causes someone to buy a luxury item. It means the pooled pattern was more pronounced when the purchase had a conspicuous, audience-facing character. If your own discretionary spending tends to involve social occasions or status-signaling goods, the finding is relevant as a prompt to make the amount more visible before paying.
Pro-social consumption: a weaker effect
The effect was weaker for pro-social consumption, such as spending intended to benefit or support other people. The direction of the overall cashless result remained positive in the review, but the difference was less pronounced in these contexts.
That moderation cautions against assuming that every cashless purchase is equally vulnerable to reduced spending awareness. The purpose and social meaning of the purchase matter in the studies summarized by the authors.
Economic growth: a stronger effect
The cashless effect was stronger during periods of economic growth. In a growing economy, consumers may experience a different spending environment from that found during contraction or financial stress. The meta-analysis reports this as a moderator of the pooled result, not as proof that economic growth mechanically causes people to overspend whenever they use a card.
Time: the effect has generally weakened
Across the decades covered by the studies, the effect generally weakened over time. Cashless payments have become ordinary in many markets, so the contrast between “paying with cash” and “paying without cash” may be less psychologically distinctive than it was in older experiments.
This time trend is why the result should not be presented as an unchanging behavioral law. The 2024 publication summarizes evidence collected over more than 40 years; the average from that history is not a guarantee that a newly introduced payment technology will produce the same size of effect in the future.
Payment-method features: no evidence of an explanation
The authors report no evidence that features of the cashless payment method itself explained the effect. The analysis does not support saying that a particular card design, delayed billing cycle, contactless tap, rewards feature or level of payment transparency is the reason the pooled cashless difference appeared. Those features may matter to a person’s budget for other reasons, but this meta-analysis did not establish them as moderators of its result.
Why the headline should not say “credit cards always make you overspend”
Credit cards are one form of cashless payment, but the review’s category is broader. Recasting the finding as a credit-card-only result would overstate what was measured. It would also erase the distinctions the authors found across purchase contexts, economic conditions and time.
The study reports higher average spending with cashless methods than with cash; it does not say that every cashless transaction is larger, that every cardholder loses control, or that carrying cash guarantees restraint. Nor does it establish that rewards, interest charges, payment delays or a specific checkout interface produced the pooled difference.
A useful way to apply the finding is to separate three questions:
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- Visibility: Do you see a physical amount leaving your possession, or does the payment feel abstract?
- Immediacy: Can you feel the budget impact at the moment of purchase, or will the account entry appear later?
- Context: Is the purchase conspicuous, pro-social or neither?
These are practical comparison dimensions for deciding how much friction and monitoring you want. They are not additional causal findings from the paper.
Can paying with cash help you spend less?
The authors discuss cash as a possible self-control strategy for people who experience spending self-control challenges. Physical cash can create a tangible boundary: once the amount allocated for a category is gone, another payment decision is required. That makes cash a potential tool, not a prescription.
The meta-analysis did not test cash-envelopes systems, a particular budgeting product or a guaranteed reduction in spending. It therefore cannot tell you that moving a fixed amount into envelopes will save a specific percentage, or that the tactic will work for your household. The authors also caution that a payment strategy does not inherently change underlying spending habits.
If you want to test the idea, treat it as a controlled personal experiment rather than a promise:
- Choose one category. Start with a discretionary area where you notice impulse purchases, rather than converting every bill at once.
- Set the amount before shopping. Decide the period and limit in advance, and write down what the amount covers.
- Use one payment method consistently for the trial. Switching between cash and cashless payments makes it harder to see what changed.
- Record purchases and exceptions. Note the date, amount, category and any reason you exceeded the planned amount.
- Review the result without assuming causation. Compare your own spending and stress with a previous period, while recognizing that income, prices and social plans may also have changed.
A simple cash envelope can organize physical money by category if that format suits you. It is an implementation choice, not an intervention tested in the 71-paper meta-analysis. People who rarely use cash may instead prefer a written spending cap, a separate account or an immediate transaction log; those alternatives are budgeting practices, not findings attributed to the study.
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Choosing between cash and cashless payments
The review does not identify one universally superior payment method. Your choice depends on the boundary you need and the practical costs of using each method.
Cash may fit when a tangible limit is the priority
- You want the remaining amount to be visible while shopping.
- You are testing a fixed allowance for discretionary spending.
- You notice that abstract account balances make it easy to add extras.
- You can safely store and carry the amount required.
Cash also has trade-offs: it can be inconvenient for online purchases, larger transactions or merchants that do not accept it, and losing it is difficult to reverse. Those operational issues are separate from the behavioral result.
Cashless payment may fit when convenience or records are the priority
- You need online or recurring payments.
- You benefit from an electronic transaction history for reconciliation.
- You are traveling or carrying physical money would create a safety problem.
- You can maintain a visible limit through a written plan or account structure.
Using a cashless method does not require abandoning control. The relevant question is whether you have another way to make the amount and the budget consequence noticeable at the point of purchase.
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Common misreadings of the 71-study result
| Misreading | What the study supports instead |
|---|---|
| “Every card purchase makes people spend more.” | The pooled average was higher for cashless methods than for cash, with a small effect. |
| “The paper proved credit cards are the problem.” | The analysis covered cashless payment methods broadly, not credit cards alone. |
| “Statistically significant means financially large.” | The authors describe the average effect as small; no universal dollar or percentage is supplied. |
| “Cash envelopes are proven to reduce spending.” | Cash was discussed as a possible self-control strategy; envelopes were not tested. |
| “A card’s design or contactless feature explains the result.” | The authors found no evidence that cashless payment-method features influenced the effect. |
| “The effect is permanent and identical everywhere.” | It was stronger in conspicuous consumption, weaker in pro-social consumption, stronger during economic growth and generally weaker over time. |
What this means for your own budget
Use the finding to locate situations where a spending boundary is easiest to lose, not to label yourself as incapable of self-control. If a conspicuous purchase is hard to evaluate in the moment, decide the maximum amount before entering the store or event. If a cashless checkout makes additions effortless, pause to total the basket before confirming payment. If cash is impractical, create an equivalent visible limit in your written plan or account setup.
Keep the test narrow enough to learn from it. Change one category or context, track the actual transactions, and account for changes in prices, income and plans. A personal result that differs from the pooled average is not a contradiction; it is what an average allows.
The strongest conclusion supported by the article is therefore modest: across 71 papers, cashless payment was associated with a small increase in average spending compared with cash. Context and time changed the size of that pattern, and the evidence does not justify promising that switching to cash—or to any particular budgeting tool—will reduce your spending by a fixed amount.
Read the original article
The publisher’s record, abstract and citation details are at https://doi.org/10.1016/j.jretai.2024.05.003. An open-access copy of the full article is available at https://cashessentials.org/app/uploads/2024/10/1-s2.0-S0022435924000216-main.pdf.
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