Abstract
The purpose of this research was to investigate the mechanisms that explain why people choose to buy on credit. The individual characteristics of materialism, impulsivity and financial knowledge were analysed in order to better understand the relationship that exists between payment conditions and the decision to purchase on credit. Two experiments with a total sample of 409 respondents were conducted. Our analyses reveal that the offer of a discount for payment in cash has a negative effect on the propensity to buy on credit, regardless of whether interest was charged or not. Personal characteristics also play an important moderating role: individuals with high levels of materialism and impulsivity tend to buy on credit more. When the type of product is hedonic as opposed to utilitarian, there are larger variations in the average intention to buy on credit.
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