Some people attempt to repair their sense of self-worth by purchasing luxury items when their egos are threatened because they performed a task poorly or because they were told that they’re not as good as they hoped (or expected). And worse, they’re more likely to use credit cards to pay for these self-indulgences.


Since various studies have established that parting with cash can actually be psychologically painful, one study investigated whether people might be more likely to use a credit card when feeling badly about themselves (Pettit & Sivanathan, 2010).


After participants performed an ambiguous computer test, researchers told half that their spatial reasoning and logic ability scored in the 12th percentile (a fancy way of telling them they’re not very smart!). The other half was told that they scored in the respectable 88th percentile. How did this impact each group’s spending tendencies?


When asked how they might pay for a consumer product that they’d been considering purchasing, the 12th-percentile people, whose ego had been threatened, were significantly more likely to say they’d use credit.


In a follow-up study, participants were instructed to think about buying a pair of jeans. Half were told to think about exclusive, high-status, designer jeans, while the other half were told to think about normal, everyday jeans. They all took a computer test and were either told they had scored poorly or well as in the previous test. Researchers found that the threat to self-esteem made people willing to pay almost 30% more for the luxury jeans. It also made them over 60% more likely to purchase the jeans with a credit card.


Does ego threat make any purchase look good? Or are luxury items viewed as more effective for repairing self-esteem?


Turns out, luxury items are especially effective at reassuring us of our value.


When their self-esteem was threatened, the participants who were considering purchasing everyday jeans didn’t increase the amount they’d pay, nor did it increase their willingness to use credit over cash.


The study showed that when our egos are threatened, we may be more likely to seek luxury goods and more likely to resort to using credit to obtain them, despite the interest and fees associated with credit purchases. Because parting with cash is perceived as psychologically painful, paying by credit card may seem, in the moment, to protect our self-esteem. Of course, it probably won’t feel so good when the credit card bill for that luxurious indulgence arrives!


These studies may also demonstrate how high-interest credit offers targeting consumers of low socioeconomic status can have disastrous consequences, especially when those consumers suffer from low self-esteem.


At Sahaja, Self-Esteem is another widely researched topic and meditation can certainly help. Read more on How Sahaja Helps Self-Esteem.

Pettit, N. C., Sivanathan, N. The Plastic Trap: Self-Threat Drives Credit Usage and Status Consumption. Social Psychological and Personality Science, 2010; 2 (2): 146.