Paying with plastic fundamentally changes the way we spend money, altering the calculus of our financial decisions. When you buy something with cash, the purchase involves an actual loss ─ your wallet is literally lighter. Credit cards, however, make the purchase abstract, so that you don't really feel the downside of spending money. Brainimaging experiments suggest that paying with credit cards actually reduces activity in the insula, a brain region associated with negative feelings. As George Loewenstein, a neuroeconomist at Carnegie Mellon, says, "The nature of credit cards ensures that your brain is anesthetized against the pain of payment." Spending money doesn't feel bad, so you spend more money. Consider this experiment: Drazen Prelec and Duncan Simester, two business professors at MIT, organized a reallife, sealed-bid auction for tickets to a Boston Celtics game. Half the participants in the auction were informed that they had to pay with cash; the other half were told they had to pay with credit cards. Prelec and Simester then averaged the bids for the two different groups. It turns out that the average credit card bid was twice as high as the average cash bid. When people used their credit cards, their bids were much more careless. They no longer felt the need to limit their expenses.